SWEDEN Trends and Developments Contributed by: Niclas Rockborn, Arijan Kan and Rikard Sundstedt, Gernandt & Danielsson
transaction practice. Recent criminal investigations involving persons in senior corporate functions have further increased awareness that sanctions exposure may result in personal liability, corporate fines and intrusive investigations. In Swedish mergers and acquisitions, the focus has expanded from straightforward list screening to the target’s historical and indirect exposure. Relevant areas include: • exports; • payment flows; • distributors; • end users; • foreign subsidiaries; • ownership structures; and • restricted contracts. In a share acquisition, historical exposure remains with the target after completion. Identified risks may be addressed through warranties, covenants, con - ditions precedent, indemnities or purchase price protection, while incomplete information may justify enhanced pre-completion review or post-completion remediation. Financing and payment arrangements increasingly require separate analysis. A transaction may be law - ful in principle but impossible to complete through the proposed banks, currencies or payment routes because a bank applies stricter internal policies, requires further ownership information or is unwilling
to assume the relevant risk. Transaction documents may therefore need to address restrictions affecting lenders, account banks, sources of funds and pay - ment intermediaries. A contractual payment obliga - tion does not authorise a prohibited transfer, and an authorisation covering one element of a transaction does not necessarily extend to related financing, fees or payments. Sanctions clauses have accordingly become more common in Swedish commercial agreements. Under Swedish law, sanctions do not automatically termi - nate or suspend an agreement, nor exclude liability for non-performance. The consequences depend on the applicable restriction, the contractual terms and general principles of Swedish contract law. Clauses may address suspension, termination, alternative performance, notice and prolonged prevention of performance. They should also distinguish between legally binding sanctions and internal policies or for - eign sanctions that do not apply under Swedish law. Disputes may arise over contractual performance, payment obligations and the enforcement of judg - ments or arbitral awards. Certain sanctions regimes contain no-claims provisions restricting claims by designated or specified parties where performance has been affected by sanctions. Even where the par - ties’ underlying contractual rights have been deter - mined, payment, transfer of assets or enforcement may remain prohibited. The existence of a contractual right must therefore be distinguished from whether that right can lawfully be exercised or enforced.
255 CHAMBERS.COM
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