ISDA Guidance Note for Addressing Sanctions Issues in ISDA Documentation

In December 2019, ISDA published a white paper (available here) examining the unique aspects of derivatives transactions that can present issues in interpreting how sanctions programs should apply in the context of derivatives and analyzed these issues in the context of recent sanctions program experiences. The white paper proposed principles to ensure the continued safe operation of derivatives markets and minimize market disruption and economic consequences for non-sanctioned entities, while neither compromising foreign policy or national security goals, nor conferring any benefit on sanctioned entities or otherwise harming the objectives of any sanctions program.

While ISDA’s standard form agreements, definitional booklets and confirmation templates include provisions that might be activated by sanctions, these documents have not specifically addressed the potential unique consequences of novel economic sanctions programs on derivatives counterparties or transactions (as further outlined in the white paper).  This guidance note therefore considers when parties may wish to include specific provisions addressing sanctions issues in ISDA documentation, explains the purpose of these provisions and provides example provisions that can be adapted by parties for use in their negotiated agreements.

Click on the attached PDF to read the guidance note.

Documents (1) for ISDA Guidance Note for Addressing Sanctions Issues in ISDA Documentation

ISDA AGM Studio: David Bailey

David Bailey, executive director, prudential policy, at the Bank of England, speaks with ISDA CEO Scott O’Malia about the UK’s approach to Basel 3.1, the impact of the revised US Basel III endgame on cross‑border consistency and the role of the...

ISDA AGM Studio: Scott O'Malia and Chris Edmonds

Christopher Edmonds, president, fixed income & data services, at Intercontinental Exchange, speaks with Scott O’Malia, ISDA CEO, about how market volatility, regulatory change and technological transformation are reshaping global markets. The discussion explores what recent volatility has meant for participation,...

ISDA AGM Studio: Bill Borden, Microsoft

Bill Borden, corporate vice president, worldwide financial services, at Microsoft, speaks with Mark New, ISDA’s co-head of digital transformation and senior counsel, about how artificial intelligence (AI) is shaping the future of financial markets and the key factors firms should...