Embargoed person: Overview, definition, and example
What is an embargoed person?
An embargoed person is an individual or entity that is prohibited from engaging in certain activities, such as conducting business, trading, or receiving financial support, due to restrictions imposed by government or regulatory authorities. These restrictions typically arise from national security concerns, violations of international law, or involvement in activities such as terrorism, human rights abuses, or illegal trade. Being identified as an embargoed person means that a person or company cannot participate in transactions or receive goods and services from certain countries or businesses without violating legal sanctions.
Why is being an embargoed person important?
Being an embargoed person is important because it highlights the legal limitations and consequences that individuals or entities may face due to their involvement in activities deemed unacceptable by the international community or specific governments. For businesses, ensuring they do not engage with embargoed persons is crucial to avoid penalties, fines, or damage to their reputation. For individuals, being on an embargo list can prevent access to financial systems, business opportunities, or international travel, significantly affecting personal or professional activities.
Understanding embargoed person through an example
For example, a business might be conducting an international transaction when it discovers that one of the individuals involved in the deal is on a government-issued list of embargoed persons. Due to this, the business would be prohibited from completing the transaction without facing legal consequences. This ensures that companies do not indirectly support or engage with individuals or organizations involved in illegal or unethical activities.
In another example, an individual who has been identified as an embargoed person due to alleged ties to a foreign government engaged in human rights violations may be restricted from accessing financial services or conducting business with entities in certain countries, such as the United States or the European Union.
An example of an embargoed person clause
Here’s how a clause related to embargoed persons might appear in a contract:
“The Parties agree not to engage in any transactions or business relationships with any individuals or entities that are identified as embargoed persons under applicable laws or regulations. Each Party warrants that they are not an embargoed person, and they will notify the other Party immediately if they become subject to any such sanctions.”
Conclusion
An embargoed person is an individual or entity restricted from participating in certain activities due to sanctions or legal restrictions. These restrictions are typically put in place for national security reasons, human rights concerns, or legal compliance. For businesses, being aware of embargoed persons is crucial for ensuring compliance with laws and avoiding legal or financial penalties. It is important to conduct thorough due diligence to ensure that business dealings do not violate these sanctions.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.