Armed conflict does not respect borders, and neither do its financial consequences. The wars in Ukraine and the Middle East have triggered the most extensive use of financial sanctions in modern history — freezing hundreds of billions in assets, cutting off banking systems from SWIFT, and forcing businesses across the EU to reassess their counterparty relationships and compliance frameworks.
The Sanctions Architecture: How It Works
Three major sanctions regimes operate simultaneously: EU sanctions (directly applicable in Greece), US OFAC sanctions, and UK OFSI sanctions. Each has different designation lists, carve-outs, and enforcement mechanisms. Greek banks must implement EU sanctions immediately upon publication. A Greek company that continues doing business with a newly designated entity — even unknowingly — may face significant penalties.
Asset Freezes: What They Mean in Practice
When an individual or entity is designated under EU sanctions, all their funds within the EU are immediately frozen. Greek banks must block accounts and report the freeze to the Ministry of Finance. For those affected, the consequences include inability to pay suppliers, blocked receivables, and paralysed operations. Challenging a designation requires specialist legal expertise and can take months.
SWIFT Disconnection and Payment Disruption
The disconnection of Russian banks from SWIFT demonstrated that financial infrastructure itself can be weaponised. Businesses with single payment corridor dependency face serious fragility. Greece’s role as a shipping, tourism, and energy hub creates disproportionate exposure to Eastern Mediterranean and Black Sea payment disruptions.
Force Majeure and Frustration of Contract
When sanctions make contract performance impossible, the legal question is whether force majeure or frustration applies. Greek law recognises force majeure but applies it narrowly — a blanket sanctions restriction does not automatically excuse performance if workarounds exist. Early legal advice before a performance failure significantly improves available options.
Correspondent Banking and De-Risking
International banks are increasingly restricting correspondent relationships with high-risk jurisdictions. Greek businesses with trade ties to the Middle East or North Africa may find their banks reducing appetite for transactions in those corridors. The response involves identifying alternative banking relationships and using instruments such as letters of credit.
What Businesses and Individuals Should Do Now
Three steps are essential: conduct a sanctions compliance audit of all counterparty relationships and payment flows; review and update contract templates with current-standard force majeure and sanctions clauses; and establish a legal response protocol so that when a sanctions issue arises, the business can respond quickly and correctly.