Sanction Clauses Guidance Paper 2010

Sanction Clauses Guidance Paper 2010

Guidance Paper on the Use of Sanction Clauses for Trade Related Products

The use of clauses related to sanctions in trade transactions has become a problematic issue for banks involved in international trade, and particularly in letters of credit. The ICC Commission on Banking Technique and Practice therefore has decided to draw the attention of the trade finance community to the use and impact of sanction clauses.

With these guidelines, ICC’s primary intention is to make practitioners aware of the need to be careful in their choice of counterparties or service suppliers and to emphasize that it is their responsibility to ensure that they do nothing that brings into question the irrevocable nature of the credit or guarantee, the certainty of payment, or the intent to honour obligations.

The guidelines were drafted under the stewardship of the ICC Task Force on Anti-Money Laundering, a standing body composed of more than 60 experts in the anti-money laundering field.

Highlights

Inclusion and implication of sanction clauses in bank transactions

Examples of sanction clauses

Recommendations