Guy Harrison, general manager of risk and compliance with Dow Jones, describes the risks that companies face today from new sanctions and regulations imposed by the U.S. and other governments around the world.

Sanctions pose a severe threat to companies in more ways than the initial fine that might be imposed. There’s also the risk of reputational damage and difficulty in raising capital in future. “There are quite far-ranging impacts of getting things wrong,” says Harrison.

The risk extends well beyond direct sanctions, to include those arising from doing business with an entity that is more than 50% owned by a sanctioned individual or company. Additional trade regulations are also a concern, given the unprecedented rate of change in U.S. policies with regard to countries such as China, Russia and Venezuela. The same situation can be seen all over the globe, with “vast amounts of complexity to keep up with.”

The Biden Administration has largely continued the approach of its predecessor to sanctions and trade regulation, although the reasons for imposing sanctions might change. “We might see more of a focus on human-rights abuses rather than trade war-prompted,” Harrison says, but the direction remains very much the same. If anything, we’ll see a ratcheting up of these sanctions over the next few years.

Companies must take care to avoid violations in multiple areas, including anti-money laundering, financial schemes and anti-bribery rules. In the case of the last, it’s crucial that U.S. companies doing business in high-risk jurisdictions “not fall prey to those sorts of traps.”

In many respects, says Harrison, the COVID-19 pandemic has resulted in a pause in enforcement actions, but as it begins to ease, government agencies are likely to engage in “regulatory catch-up,” boosting enforcement efforts over the coming year.