Economic sanction are measures imposed by governments or international organizations to restrict or penalize specific individuals, entities, or countries in order to achieve foreign policy or national security objectives. Most often, these measures involve trade restrictions, financial restrictions, or diplomatic actions, such as the freezing of assets, the prohibition of travel, or the imposition of embargoes. There are many reasons for imposing sanctions, including promoting democracy and human rights, discouraging aggressive military action, curbing terrorism, or punishing non-compliance with international law.

Corporate service providers can be impacted by economic sanctions if they are found to be aiding or facilitating individuals, entities, or countries that are subject to sanctions. This may include providing services that enable sanctioned parties to evade restrictions, launder money, or engage in other illicit activities. When a corporate service provider becomes subject to sanctions, they may face license suspension, revocation, or other penalties. This not only damages their credibility and reputation but also affects their clients’ operations, legal compliance, and overall success. It is therefore essential for companies to stay informed about sanctions and ensure they work with corporate service providers that remain in compliance with international and local regulations.