In the recent years, the global economy has been a subject to a number of sanctions restrictions that have made international trade more difficult for many companies. One of the key elements of sanctions policy is commodity sanctions – bans or restrictions on the export and import of certain categories of goods. These measures can be imposed both by the certain states and international organizations. To avoid financial and reputational risks, all participants of the supply chain are obliged to check goods for compliance with sanctions lists.

Commodity sanctions are measures aimed at restricting the circulation of specific goods among countries or economic entities that are subjects to sanctions. Such measures may be introduced for foreign policy purposes to put pressure on certain countries or companies, as well as to prevent violations of international norms, for example in the area of security or human rights.

Commodity sanctions often affect strategically important categories of goods, including:

Sanctions may include either a complete ban on transactions with certain goods or the introduction of quotas or licenses for their export or import. Violation of these restrictions may result in serious consequences, such as fines, accounts blocking, cargo delays at customs, additional logistics costs, secondary sanctions, seizure of products, and even administrative or criminal prosecution.

Modern sanctions regimes that restrict trade in certain goods are an important instrument of international policy. The main initiators and beneficiaries of such measures are the United States, the European Union and Great Britain. Along with them, China, the Republic of Korea, Canada, Australia and other countries maintain their own systems of export control and sanctions restrictions. These measures are regulated by national laws.

In response to external sanctions, Russia introduced its own special economic measures (SEM), including a ban on the import of certain categories of goods from countries supporting sanctions and restrictions on the export of strategically important resources.

One of the key tools for adapting to sanctions restrictions has become parallel import, which allows goods to be imported without the consent of the copyright holder, bypassing sanctions barriers. This mechanism helps to fill the gap in products on the domestic market, maintaining economic stability in the context of global trade restrictions.

Commodity sanctions can seriously affect business processes:

It is extremely important for business to promptly monitor changes in the sanctions lists and avoid transactions that may violate sanctions restrictions. However, performing this task manually is associated with a number of difficulties.

Legislation on commodity sanctions is complex and varied. The analysis of sanctioned goods is often labor-intensive and requires significant time resources, since there are no uniform sources, classifiers and standards. For example, in the United States, commodity restrictions can be published both in the text of laws without indicating product codes, and in separate appendices to regulations specifying product codes and names. In other countries, like Japan, sanctions may be published exclusively in national languages.

When checking goods for sanctions, companies face difficulties related to:

All this makes the process of monitoring sanctions extremely complex and requires significant resources.

All necessary data is collected and structured in a single space in Globas with Sanctions Compliance module. This allows companies to promptly check goods and counterparties for sanctions restrictions, avoiding potential risks and simplifying compliance procedures when conducting foreign economic activities.

For companies engaged in foreign economic activity, it is especially important to have an IT solution for checking counterparties and goods for compliance with sanctions requirements.

Sanctions Compliance, Globas module, offers an effective solution that allows to minimize risks when making international transactions.

Globas contains the world's largest database of sanctioned goods - both among participants in the information market in the Russian Federation and abroad.

We analyzed hundreds of sanctions and counter-sanctions documents from a dozen countries: Russia, the USA, the European Union, Great Britain, Switzerland, etc.; translated them into Russian; highlighted the most important things and presented information in a concise and convenient form.

Sanctioned Goods section will help to speed up the verification of export-import restrictions and save you from having to manually parse through Resolutions and Decrees.

Globas solution differs fundamentally by analysis of a wide range of sources and the maximum list of countries that impose sanctions and counter-sanctions. The search is conducted not only by goods and services, but also by technical descriptions of chemical elements, and the search result is presented in a structured and concise form. The list of sanctioned goods is updated promptly as the lists in the primary sources are updated.

Checking for commodities sanctions is available in Globas for users of Sanctions Compliance. The module allows to check not only goods, but also Russian and foreign counterparties, individuals, as well as water and air transport according to the consolidated sanctions list, including the 50% Rule.

We also offer flexible API integration solutions to suit your business and unique audit requirements, with the ability to customize queries to meet your individual needs.

India is one of the largest and fastest growing economies in the world.

Partnering with Indian companies can bring significant benefits, including access to new markets and cost reductions through the use of advanced technologies. However, before entering into business relationship with an Indian counterparty, it is necessary to conduct a thorough check of the company in order to minimize risks and avoid possible problems. Failure to understand legal regulations, financial reporting, business practices and cultural differences can lead to serious consequences such as financial losses, violation of laws or loss of reputation.

In the context of expanding international cooperation, many companies are striving to enter new markets and establish partnerships with foreign counterparties. India attracts special attention from entrepreneurs and investors from all over the world. With population of over 1.4 billion people and a diverse economy, there are huge opportunities for business, but also many challenges that require heightened levels of due diligence.

The first step in checking an Indian counterparty should be to confirm its legal status and registration.

Forms of enterprise in India:

Information about shareholders is not disclosed in the publicly available data, however, it is included in the annual report that all the companies are required to submit. The financial year ends on March 31.

Companies are required to publish financial statements, although general partnerships and sole proprietorships are not required to register with the Companies Registry and submit statements.

As of 2021, there are more than 63 million partnerships and sole proprietorships and over 1.3 million companies (private, public companies) registered in India.

Using financial statements, you can check both the official registration of a potential counterparty and its financial status. If financial statements are not available, it must be requested directly from the company. For more in-depth and thorough analysis of financial condition and creditworthiness, financial statements should be requested for the last few years, as well as income and expense reports. It is important to ensure that company does not have significant debts or liabilities that could impact its ability to meet its obligations to you. It is also helpful to obtain credit report, which will show company's credit history and creditworthiness.

You can request licenses and certificates from your Indian counterparty to carry out compliance procedures. They are not mandatory, but their presence or absence will help ensure that due diligence process is followed.

Any operating company in India, except general partnerships and sole proprietorships, is required to have a business license and a unique identification number. Most Indian companies (except LLPs) have Corporate Identification Number (CIN). You can check registration details of a company on the Ministry of Corporate Affairs (MCA) website using company name or its CIN. Companies with LLP status are given an identification number (LLPIN), which can also be verified on the MCA website.

The CIN number provides key information about a company, and by looking at this 21-digit code, you can determine the type of a company, its location, and the date it was incorporated.

First letter of the CIN indicates the status of a company: U for non-public companies and L for public companies.

Next five digits represent the industry in which the company operates. Then there are two numbers indicating the state in which the company is registered. Next four digits indicate the year the company was registered.

Three letters following this determine the type of ownership of the company. For example, PLC means a public limited company, SGC means a state government company, and OPC means a sole member company.

Last six digits of the CIN number are unique company registration number that is officially assigned to a company.

Not all companies in India have export license that allows them to conduct foreign economic activities. Therefore, many organizations cooperate with transport and trading companies to organize export and import of products.

However, having export license significantly enhances company’s reputation, as it indicates supplier’s greater experience in international trade and working with foreign clients.

Taxpayer certificate, known as GST Certificate, is a mandatory document. It must be obtained by all companies that provide goods or services and whose annual revenue exceeds 20 LAK Indian Rupees (~$24K).

Company Tax Registration Number (GSTIN) can be checked on the Government of India website under the Goods and Services Tax section.

ISO 9001 certification is one of the most frequently requested international certifications from suppliers. This certificate confirms that the company has implemented quality management system that can be applied in various industries, not only in manufacturing.

Company that is ISO 9001 certified must have quality control department that is responsible for monitoring processes and checking products for compliance with established requirements. This system includes measures to correct identified deficiencies and control effectiveness of operations.

Indian suppliers are ISO 9001 certified if they export to America and Europe. Because many large organizations and brands require this certificate to start cooperation.

However, having a certificate does not guarantee that company's daily operations are fully compliant with the quality management system. In some cases, suppliers obtain certification only for appearance's sake and do not pay due attention to maintaining effective internal quality control system.

To prevent possible legal problems, you should check for any litigation or legal disputes that company might be involved in. In India, this can be done through the National Judicial Data Grid portal or by researching local news and publications about the company. It is important to pay attention to frequency and severity of such disputes, as this may indicate problems in the company's management or business practices.

Company's reputation in the market is an important aspect. Check reviews and ratings of a company from other clients and partners. This can be done by checking online reviews, as well as through business social media where you can find information about key executives and their professional reputation.

Indian market is characterized by certain specific risks. For example, presence of "family-owned" companies, where a significant portion of management is concentrated in the hands of one family clan, can create problems with transparency and management efficiency. It is also worth considering cultural differences in negotiating and deal-making - Indian companies may use longer timeframes for decision-making, which is important to take into account when planning joint projects.

In addition, India has tax and currency regulations that may impact financial transactions with counterparties.

Checking Indian counterparties requires comprehensive approach, including verification of legal status, financial stability, presence of litigation and reputation. Also consider specific risks associated with doing business in India. With a careful and informed approach, you can minimize risks and successfully cooperate with Indian companies.

Independently checking a counterparty from India is a complex task that requires attention, time and deep understanding of legal norms. To achieve the best results, it is recommended to contact professionals with the necessary knowledge and experience.

Information agency Credinform and Information and analytical system Globas can help in performing due diligence tasks when checking international business partners, including companies from India.

In Globas you can online obtain information about companies in Belarus, Kazakhstan, Kyrgyzstan, Latvia, Moldova, Tajikistan, and also generate a report on more than million companies from Europe, America, Africa and Asia-Pacific region. Report will include information on registration, financial statements, shareholders, beneficiaries and all basic information necessary to make an informed decision.

For a more detailed and thorough check, you can order an online report. Your request will be processed by a team of professional experts with extensive experience and specialization in this field. You will receive comprehensive information, including registration data, financial statements, ownership structure taking into account international connections, expert assessment, as well as verification of connections and affiliations with Russian companies.