Regulatory Framework
Sanctions regulations impose restrictions on trade, investments and services involving specific countries, companies and individuals. In practice, businesses must know who they are dealing with and ensure that goods and services subject to export restrictions are not routed to or via sanctioned countries, companies or individuals – whether directly or indirectly through intermediaries.
Export control regulations govern the export of military goods, technology and services, as well as civilian goods and services that may have military applications (dual-use). They apply irrespective of the destination of the export. Businesses are required to obtain a licence for the export of goods, technology and services listed in Lists I, II and III of the Export Control Regulations. A licence may also be required in other cases where there are concerns relating to end-use or where Norwegian security and defence interests are implicated. These considerations may affect whether a licence is granted and can therefore represent an operational risk when exporting such goods, including in the form of rejections, delays or conditions attached to deliveries.
Recent geopolitical developments, particularly in relation to Russia, China and Iran, have led to an increasingly complex and fragmented sanctions landscape. New restrictions are often introduced at short notice, requiring businesses to respond swiftly. Beyond regulatory compliance, managing transaction and reputational risk requires careful and commercially informed decision-making.
Risk of non-compliance
Non-compliance with sanctions and export control regulations can have serious consequences. Both businesses and individuals – including senior management and board members – may be held personally liable and face criminal penalties, including substantial fines and imprisonment.
Regulatory breaches may also have significant commercial consequences, such as confiscation of goods, loss of licences, exclusion from markets and severe reputational damage, potentially undermining trust among customers, investors and financial institutions.
Typical risk situations
Businesses commonly encounter sanctions and export control issues in a variety of contexts. Particular vigilance is required in:
- activities connected to sanctioned countries, such as Russia and Iran
- transactions and activities that have an elevated sanctions risk due to industry and sector, such as maritime, IT/technology, defence, and banking and finance
- transactions involving advanced technology, and particularly where these have a connection to higher-risk countries
- sale, export and transfer of goods, technology, software and knowledge within defence and dual-use, including intangible transfers, cloud services, technical assistance and intermediary activities
- use of foreign intermediaries, distributors or partners, as well as in re-export, particularly where these are located in countries known for sanctions circumvention or considered high-risk from a compliance perspective
- transactions with exposure to other countries' sanctions regimes, and particularly US sanctions and export control regulations which have a wide scope and may apply where US persons, companies, goods and dollars are involved
- mergers, acquisitions and joint ventures involving foreign parties or assets
- research collaborations, access management, visitor control and knowledge transfer, including the risk of unlawful transfers via partners in third countries
Our expertise and assistance
Thommessen advises clients across a wide range of industries on ensuring compliance in their global operations. Our experience is particularly relevant to businesses with heightened risk exposure, including shipping and maritime, energy and natural resources, technology and IT, defence, and finance and capital markets.
Our team includes lawyers with backgrounds from in-house legal departments, relevant regulatory authorities and the prosecuting authorities. This provides us with deep insight into both the regulatory framework and its practical enforcement.
We advise on risk and counterparty assessments, the development and implementation of compliance programmes, and ongoing strategic guidance. We also assist in engagement with authorities and act as defence counsel for businesses and individuals in sanctions and export control matters, including criminal cases and investigations.
