Sanctions Risks for the US/EU/UK Board Members of Israeli Companies
Question: We are an Israeli company, but have board members who are US, EU, or UK citizens. Should we be concerned about application of a foreign sanctions regime?
Answer: Under the US regulations, a US person (for example, a board member of an Israeli company, who is a US citizen), whenever they are located, may not approve, finance or guarantee a transaction by a foreign person (an Israeli company, for example) if that transaction would be prohibited by the US sanctions regulations, if it were to be performed by a US person or within the US territory. This means that a US board member cannot vote on a transaction, or execute transaction documents or be otherwise involved in a transaction by a foreign company if that transaction would violate or be prohibited under the US sanctions regime. In general, US sanctions apply to any employee, officer or director of a non-US company who is a US citizen or permanent resident, regardless of where they are located.
Similarly, EU sanctions apply to EU nationals in any location. It is therefore sufficient that an EU national is involved. Voting on a transaction or otherwise approving it, or signing or approving transaction documentation, would constitute such involvement. Likewise, in the UK, all UK nationals must comply with UK financial sanctions that are in force, irrespective of where their activities take place.
Israeli companies should be mindful of foreign sanctions regimes and any activity that may inadvertently implicate their US, EU, or UK board members.
*The contents of this message, current at the date of publication, are for reference and general informational purposes only and do not constitute legal advice. You should contact your attorney to obtain advice with respect to any particular legal matter. You should not act or refrain from acting on the basis of information in this publication without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.
Question: We are an Israeli company, but have board members who are US, EU, or UK citizens. Should we be concerned about application of a foreign sanctions regime?
Answer: Under the US regulations, a US person (for example, a board member of an Israeli company, who is a US citizen), whenever they are located, may not approve, finance or guarantee a transaction by a foreign person (an Israeli company, for example) if that transaction would be prohibited by the US sanctions regulations, if it were to be performed by a US person or within the US territory. This means that a US board member cannot vote on a transaction, or execute transaction documents or be otherwise involved in a transaction by a foreign company if that transaction would violate or be prohibited under the US sanctions regime. In general, US sanctions apply to any employee, officer or director of a non-US company who is a US citizen or permanent resident, regardless of where they are located.
Similarly, EU sanctions apply to EU nationals in any location. It is therefore sufficient that an EU national is involved. Voting on a transaction or otherwise approving it, or signing or approving transaction documentation, would constitute such involvement. Likewise, in the UK, all UK nationals must comply with UK financial sanctions that are in force, irrespective of where their activities take place.
Israeli companies should be mindful of foreign sanctions regimes and any activity that may inadvertently implicate their US, EU, or UK board members.
*The contents of this message, current at the date of publication, are for reference and general informational purposes only and do not constitute legal advice. You should contact your attorney to obtain advice with respect to any particular legal matter. You should not act or refrain from acting on the basis of information in this publication without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.
