Flood of sanctions worldwide increases uncertainty for small businesses | Europe| News and current affairs from around the continent | DW | 23.05.2018
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Flood of sanctions worldwide increases uncertainty for small businesses

Every day new sanctions are announced, imposed or lifted. Small to medium-sized businesses can easily lose track of the situation, but some start-ups are turning the knowledge gap into a business opportunity.

The Russian Duma has cleared the way for new sanctions against the United States and other countries that have already taken punitive measures against Moscow.

At the start of April, the US imposed sanctions on one of Russia’s biggest firms, and on certain influential businesspeople. US President Donald Trump has also announced tough new sanctions on Iran after pulling out of the nuclear agreement. European companies that do business in Iran may also be affected.

The EU Commission is therefore looking at reactivating an older law, known as the Blocking Statute, which would make it illegal for European companies to comply with the US sanctions against Iran; if they do, they will incur punishment.

Read more: Experts question impact of economic sanctions

Medium-sized businesses don’t have big law firms

This is just a brief, incomplete outline of the sanctions news from recent weeks. The effectiveness of sanctions is debatable, but German companies have to react to new trading conditions on a daily basis. “Small and medium-sized German businesses are very responsive to the inflationary sanctions and sanction announcements – they adapt to the new situations,” says Patrick Bessler, the editor-in-chief of the specialist foreign trade magazine Aussenwirtschaft.

But how do small and medium-sized business maintain an overview of the daily announcements of the changes to or lifting of existing sanctions, and of sanctions newly agreed and ratified? "Uncertainty is increasing," Bessler is sure of that.

Ilja Nothnagel, an expert in foreign trade from the Association of German Chambers of Industry and Commerce (DIHK) takes a similar view. "Smaller businesses in particular don’t have departments that deal with sanctions issues, nor do they have big law firms on their side to ensure they are legally protected," he says. Those responsible are supposed to keep themselves informed by checking with the foreign chambers of commerce and at the Federal Office for Economic Affairs and Export Control.

Read more: From Russia to Syria and Iran – Do EU sanctions work?

Software to support small businesses

Companies use the sanctions list of the Bundesanzeiger, an official publication similar to the US Federal Register, as the basis for making their decisions. Every day the Bundesanzeiger checks all the relevant regulations worldwide and collates the sanctions in sanctions lists. At present, these lists have more than 26,000 entries.

Some shrewd start-up companies are now offering software solutions that are updated daily and can be directly linked to a company’s own software. "There have been sanctions lists since 2002, starting with the attack on the World Trade Center. What’s interesting are the lists for small to medium-sized businesses, which have existed for about two years," says Tobias Siemssen, the head of the small software manufacturer easycompliance.

The company has three employees, and its clients are predominantly smaller businesses, machine manufacturers and hospital groups. The easycompliance software is integrated via different interfaces into the company’s accounts and business software programs. It then automatically checks client and supplier data every day against the updated sanctions list and, if necessary, raises the alarm.

Either way, as DIHK expert Ilja Nothnagel says, whether they get it from the paper or through the software, "businesses must be able to rely on the information being complete and correct."

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