Recent events have thrown the spotlight on sanctions. Sanctions provisions in facilities agreements are frequently keenly negotiated, and most lenders have minimum requirements. We typically see lenders focus more on the activities of the obligor group and its business than on the other lenders and finance parties to the transaction.
Accordingly, we anticipate many of our clients revisiting their sanctions policies and giving greater weight to mitigating risks associated with any party to a transaction becoming the subject of sanctions, not just members of the obligor group.

In our previous article, ‘Commodity Finance: the complete security package’ (2021) 5 JIBFL 351, we touched upon how disruption to commodity transactions, as a consequence of lockdowns, has led to the uncovering of fraudulent activities due to enhanced oversight of borrowers’ businesses and how a well-constructed security package can mitigate this risk to a degree. In this follow-up article we examine in detail the different ways in which fraud can manifest itself in commodity finance transactions, the actions lenders can take to try and mitigate against such frauds occurring in the first place and the possible resolutions avail