Compliance risks in international trade include potential fines, criminal prosecution, and market exclusion due to violations of laws and regulations across borders. At Musch Legal, we observe that compliance is becoming an increasingly significant factor — particularly due to the expansion of sanctions, CSDDD, and the extraterritorial effect of US and British laws. A structured compliance program prevents severe financial and reputational damage.
What is the legal issue? (Why is compliance so serious now?)
Compliance impacts anti-corruption, sanctions, competition law, GDPR, ESG, export control, and sector rules. Different requirements apply per country and regime. The extraterritorial effect of the UK Bribery Act 2010 and the US FCPA 1977 affects Dutch parties with foreign ties. CSDDD requires due diligence throughout the supply chain. Fines can amount to several percent of global turnover. Non-compliance leads to reputational damage and exclusion from government markets.
What does the law say? (Which regulations affect you?)
GDPR (Regulation (EU) 2016/679) governs personal data with fines of up to 4 percent of turnover. CSDDD (Directive (EU) 2024/1760) mandates supply chain due diligence with fines of up to 5 percent of turnover. Sanctions regulations such as Regulation (EU) 833/2014 (Russia sanctions) and Sanctions Act 1977. Regulation 2021/821 (dual-use). UK Bribery Act 2010 and US FCPA 1977 for anti-corruption. NIS2 (Directive 2022/2555) for cybersecurity in essential sectors.
For the financial sector, additionally Wft, Wwft and MiCA. Industry-specific compliance requirements for specific sectors.
Compliance area
Main risk
Fine magnitude
GDPR
Data breach or misprocessing
Up to 4% of global turnover
CSDDD
Human rights/environmental violation chain
Up to 5% of global turnover
Sanctions
Supply to sanctioned
Criminal + million-pound fines
Anti-corruption
Bribery via agent
Unlimited + criminal prosecution
Competition
Cartel agreements
Up to 10% of global turnover
Compliance area
Main risk
Fine amount
GDPR
Data breach or misprocessing
Up to 4% of global turnover
CSDDD
Human rights/environmental violation supply chain
Up to 5% of global turnover
Sanctions
Supply to sanctioned
Criminal proceedings + million-euro fines
Anti-corruption
Bribes via agent
Unlimited + criminal prosecution
Competition
Cartel agreements
Up to 10% of global turnover
What risks do companies face? (What damage is really imminent?)
Fines under the GDPR have amounted to millions of euros on several occasions. CSDDD fines are coming into view from 2027. Sanctions against parties elsewhere in the chain can render your end products illegal. Criminal prosecution under the Economic Offences Act or foreign anti-corruption laws can lead to administrative bans. Reputational damage is typically permanent and affects client relationships, financing, and insurability.
Practical example from our practice (What damage did Musch Legal prevent?)
Musch Legal advised a Dutch company on the acquisition of a British subsidiary without a fully developed compliance indemnity. After closing, it emerged that the subsidiary had secured contracts through bribery for years. The UK Serious Fraud Office opened an investigation; the Dutch parent company was fined 8.2 million pounds. In the subsequent M&A, we built in: strong compliance warranties, uncapped indemnities, and escrow for compliance claims (15 percent of the purchase price for seven years).
What can you do? (What compliance program will you build?)
Implement a compliance program with a code of conduct, training, due diligence, and periodic audits. Appoint a compliance officer for oversight. Implement automated sanctions screening (Refinitiv, Worldcheck). Implement GDPR procedures with Standard Contractual Clauses for data transfers outside the EU. For M&A: provide for escrow for compliance claims. Update the program with every new regulation. Engage Musch Legal for a compliance audit.
Sanctions legislation for entrepreneurs