What do you do when following the rules in one country could mean breaking the rules in another?
That is increasingly the position multinational businesses are finding themselves in. For compliance teams operating across the US, Europe and China, the question is no longer simply whether a particular activity is permitted. It is about which obligations apply, how those obligations interact, and what happens when they point in different directions.
In my conversations with clients, this is becoming a much more pressing issue. Businesses are trying to understand how China’s evolving sanctions and countermeasure framework affects their operations while continuing to navigate their existing obligations under US and European regimes. For organisations with significant manufacturing, trading or other commercial interests in China, these are not questions that can sit neatly within a single jurisdiction or function.
The difficulty is that the people making these decisions are often doing so with fewer resources than they had a few years ago. Compliance teams have become leaner in many organisations, while the geopolitical and regulatory environment they are expected to navigate has become more complicated. The result is that individual compliance professionals are being asked to make increasingly consequential judgements, sometimes with significant implications for the business and for colleagues working on the ground.
China’s Anti-Foreign Sanctions Law (AFSL) provides a particularly important example of this tension. It also raises a broader question for businesses: do their compliance functions have the expertise, resources and judgement needed to operate effectively when there is no straightforward answer?
Sanctions were never simple. The consequences are changing.
It would be misleading to suggest that sanctions have only recently become complicated. They have always required specialist knowledge, particularly for multinational businesses operating across multiple jurisdictions. What has changed is the geopolitical environment around them, and increasingly, the consequences of getting a decision wrong.
The enforcement landscape has also shifted. Changes in US enforcement priorities have affected how many organisations think about their compliance resources, while China has introduced additional measures in response to foreign sanctions and restrictions. At the same time, companies continue to operate across jurisdictions whose expectations do not necessarily align.
Consider a multinational business with Chinese ownership or manufacturing but a European brand and international operations. To operate legally, it may need to satisfy American, European and Chinese requirements simultaneously. The difficulty is that compliance with one set of requirements can create exposure under another.
That puts businesses under pressure on several levels at once: legal and regulatory, certainly, but also operational and organisational. The issue is no longer simply whether the legal team can identify the relevant rule. Someone must translate conflicting obligations into a decision about what the business should actually do.
For the compliance professional making that decision, the stakes can be considerable.
China is a particularly important example
China’s Anti-Foreign Sanctions Law, introduced in 2021, forms part of a wider framework through which China can respond to foreign measures it considers discriminatory or harmful to Chinese interests. The framework has continued to develop through subsequent guidance, implementing measures and enforcement activity.
For multinational businesses, its relevance extends across international trading, manufacturing, importing and exporting, and other activities involving China. What makes the framework particularly significant is the uncertainty created when its requirements intersect with obligations imposed elsewhere.
There are also questions around retrospective application and litigation risk, as well as the potential for serious consequences where conduct is considered to threaten Chinese interests or the Chinese economy. The important point for international businesses is the practical reality of having to assess this framework alongside other sanctions and regulatory regimes, sometimes without a clear hierarchy between them.
That can make advising the business more complex and time-consuming. Advice moves beyond what is permitted and becomes: “Which obligation takes precedence, what is the defensible position, and what are the consequences if our interpretation is challenged?”
For businesses operating across several jurisdictions, that is a judgement call with commercial consequences.
When the risk becomes personal
The weight of those decisions is easy to underestimate when viewed from outside the compliance function.
A well-resourced team has more capacity to investigate an issue, bring in specialist advice, challenge assumptions and consider different scenarios. A lean team may have to do all of that while simultaneously dealing with the day-to-day demands of the business and a growing number of regulatory questions.
There is a human dimension to that as well. A compliance professional working through a difficult decision may be thinking not only about the company’s exposure, but about the people who will have to implement the decision locally. If getting the interpretation wrong could expose someone in a China team to serious consequences, the responsibility attached to the decision becomes very real.
That weight can also change behaviour. When the potential cost of an incorrect judgement is high, teams can understandably become more cautious. Decisions take longer, escalation becomes more frequent and in some cases, the organisation can become so focused on avoiding risk that it struggles to move at all.
Navigating this requires commercial judgement, the confidence to make a decision with imperfect information, the ability to communicate risk clearly, and the emotional intelligence to understand how those decisions affect the people implementing them.
The practical question: how do you set the team up for success?
There is no organisational structure that can remove the underlying geopolitical uncertainty. What businesses can do is make sure their teams are equipped to manage it.
The first step is to recognise that China cannot simply be treated as a regional compliance issue. A decision made in China can have implications for the wider organisation, particularly where global policies, supply chains and regulatory obligations intersect. The starting point therefore needs to be an understanding of the company’s overall risk tolerance and how that translates into practical guidance for local teams.
This is particularly important for people working in China. Headquarters may establish the company’s baseline policies and risk tolerances, while local teams are responsible for applying them in practice. Those employees are therefore operating in a difficult space: they understand the local environment, but they are also working for a foreign employer and implementing a global policy.
Businesses need to think carefully about how that responsibility is supported. That could mean additional expertise or headcount in China, international professionals with China experience within the wider compliance function, or carefully structured support from external advisors. The right answer will depend on the organisation, but the underlying principle is the same: local teams should not be left to navigate increasingly complex and potentially conflicting obligations without sufficient expertise around them.
That also means thinking about where expertise sits within the organisation. External advice will remain important, particularly when a question requires specialist interpretation. However, companies cannot rely solely on law firms to manage an increasingly complex and ongoing risk environment. They need people internally who understand the business, its operations and its appetite for risk, and who can turn technical advice into decisions the organisation can actually implement.
From external advice to in-house expertise
A few years ago, during our development of a sanctions team, it was still relatively unusual for companies to have this level of specialist expertise in-house. When a weighty sanctions question arose, the natural response was often to go to a law firm. That model has changed. More organisations are now bringing sanctions specialists into their own legal and compliance functions, and I expect that trend to continue as geopolitical risk becomes more embedded in commercial decision-making.
That shift is also changing what clients are looking for when they hire. Technical expertise remains essential, but increasingly, the strongest candidates are those who can operate across international borders, understand different regulatory and cultural expectations, advise senior stakeholders with clarity and confidence and bring different perspectives together without losing sight of the underlying compliance requirements.
China experience is becoming a particularly valuable part of that profile. When assessing candidates, it is a meaningful differentiator to have someone who has actually operated in that environment and understands what doing business there entails. Someone who can guide a board through the risk, rather than simply identify the relevant regulation, can bring a different level of value to the organisation.
This is where I think businesses need to be more deliberate about how they build these teams. It is understandable that, when a compliance function is already under pressure, recruitment becomes focused on finding the strongest technical candidate as quickly as possible. The challenge is that the person who looks strongest on paper may not necessarily be the person who can operate effectively across the full complexity of the role. International experience, commercial judgement, cultural awareness and the ability to bring stakeholders together are harder to assess from a CV alone.
That is one of the reasons specialist search can be valuable in this area. When a business is under pressure, having someone who can look beyond the technical requirements and properly assess how a candidate has operated in difficult, international environments can make a significant difference. It is not just about finding someone who understands sanctions. It is about finding someone who can help the organisation make better decisions about risk.
Getting ahead of the curve
Many organisations are still working out what the right response looks like. In some respects, there is a parallel with the early stages of GDPR, when businesses were trying to understand an emerging regulatory framework at the same time as working out what it meant operationally, who should own it and what additional expertise they needed.
The difference now is that businesses have an opportunity to learn from that experience. Rather than waiting for the regulatory environment to become a crisis, they can start thinking now about where the relevant expertise sits, whether their teams have enough capacity and whether the people making these decisions have the skills, experience and judgement required.
That does not necessarily mean building a large new function or hiring a dedicated specialist immediately. It means understanding where the gaps are and being realistic about the level of expertise required to manage them.
The important thing is to make that assessment before the pressure becomes acute.
This is increasingly part of the work I have with clients: helping them think not only about the hire they need to make, but about what the organisation actually needs that person to do. As the regulatory landscape becomes more complex, the answer is rarely just a functional expert. It is someone who can understand the technical requirements, operate across borders, navigate different expectations and bring sound judgement to situations where there may not be a perfect answer.
That is a different hiring brief, and it requires a different approach to finding and assessing talent.
The takeaway
The lesson from China’s evolving sanctions framework is not that businesses need to choose between complying with one jurisdiction or another. Multinational organisations will continue to have to navigate multiple, sometimes conflicting, obligations.
The question is whether they have built the capability to make good decisions when those obligations collide.
For me, that is where the conversation about compliance becomes a conversation about people. Technical expertise remains the foundation, but organisations also need judgement, international experience, commercial understanding and the ability to operate confidently when the answer is not obvious. They need teams that are resourced well enough to analyse the risk properly, and leaders who understand the weight of the decisions those teams are being asked to make.
At Adamsons, that is where we can help. If you’re navigating rising workload, rethinking your team structure or struggling to find candidates who can operate confidently across these requirements, get in touch.
