Sanctions, Sovereignty, and Strategy

Inside the Middle East’s High-Stakes Compliance Era

by BEN COCKRAM

_{WINTER 2025 |}_{OTHER FEATURES}

Sanctions, Sovereignty,
and Strategy

Inside the Middle East's High-Stakes Compliance Era

by BEN COCKRAM | Managing Director, Major, Lindsey & Africa, London

Inside the Middle East’s High-Stakes Compliance Era

A s Donald Trump returns to the White House, multinational companies around the world are bracing for a more complex and assertive regulatory landscape. While the ripple effects of his administration’s “America First” approach will be felt globally, nowhere will the impact be more pronounced than in the Middle East. Here, a swirling confluence of regional dynamics—including the intensifying Israel-Palestine conflict, significant Russian interests being deployed from the UAE, and Saudi Arabia’s rapid rise on the world stage—creates a perfect storm for compliance officers and regulatory strategists to face.

The Middle East has always been a pivotal intersection of East and West, and today, this position makes the region a microcosm of global power struggles. Businesses here must navigate an intricate maze of U.S. sanctions, local regulatory shifts, and regional rivalries.

Chief compliance officers (CCOs) at multinational corporations with Middle Eastern interests are now facing an imperative to reinforce their trade sanctions and export controls functions. The 2017–2021 U.S. administration’s “maximum pressure” campaign on Iran showcased the speed and severity with which U.S. sanctions could escalate, reverberating across Middle Eastern financial institutions, oil and gas companies, and logistics sectors. With a second “Trump era” set to bring similar pressures, compliance leaders are re-thinking resource allocations, operational agility, and real-time monitoring capacities to mitigate risks and maintain business continuity in the region.

Complex Compliance

One major change since Trump’s last tenure is the strengthened global standing of Saudi Arabia, whose regional and economic influence has grown rapidly. With Saudi Arabia attracting record foreign direct investment ($25.6 billion in 2023, according to the Ministry of Investment, up 50% from 2022) its increasing assertiveness on the global stage adds another dimension to the already complex compliance landscape. For companies navigating U.S. sanctions, this shift raises the stakes for balancing relationships with a rising Saudi Arabia alongside compliance with American foreign policy, especially given Saudi Arabia’s growing ties with both Eastern and Western powers.

For CCOs accustomed to applying global compliance policies in stable, transparent regulatory environments, the Middle East presents a unique set of challenges. Policies from headquarters may overlook region-specific nuances, leaving frontline compliance officers struggling to reconcile broad directives with the realities of complex regional relationships. As Middle Eastern countries navigate relationships with the U.S., China, and Russia, companies operating within their borders must carefully balance international business interests with local norms and alliances.

Political neutrality in particular is becoming a strained position. Recently, Abu Dhabi-based tech conglomerate G42 divested from China in a strategic shift to secure a $1.5 billion investment from Microsoft—an illustration of the balancing act many Middle Eastern companies face. In an environment where U.S. trade and technology restrictions on China are tightening, such cases underscore the need for vigilant compliance programs capable of responding swiftly to shifting alliances. Multinational compliance teams increasingly find themselves on a geopolitical fault line, where the cost of missteps can be measured in both financial penalties and reputational damage.

Stronger Sanctions

The prospect of stringent U.S. trade policies will likely force CCOs to enhance their Trade Sanctions and Export Controls capabilities. Once seen as

specialized, niche functions, sanctions compliance teams are evolving into critical pillars of corporate governance and risk management. The challenge CCOs will face is a strained and competitive talent pool. Experts also forecast a new wave of investment in compliance technology and personnel, aimed at equipping teams to meet rapid-fire regulatory changes without crippling operations.

For multinationals engaged in the Middle East, this reinforcement will entail hiring dedicated trade sanctions specialists, leveraging AI-powered monitoring systems, and instituting real-time risk assessments to keep pace with changes in U.S. and local regulations. Robert Lighthizer, Trump’s former trade representative and rumoured to be rejoining his administration, is known for his uncompromising approach to tariffs and trade restrictions—a warning to CCOs that compliance is set to grow ever more challenging and costly. For local compliance officers in the region, navigating dual compliance with U.S. standards while respecting local rules demands a deft touch and sophisticated local knowledge.

Digital Demands

As the Middle East embraces digital transformation, compliance demands are expanding in tandem. Saudi Arabia’s new Personal Data Protection Law (PDPL), which came into effect in September 2024, introduces a series of stringent requirements for companies handling personal data. Modelled partially on Europe’s GDPR, PDPL mandates that organisations within Saudi Arabia comply with strict data collection, processing, and retention standards, with noncompliance punishable by fines reaching up to 5% of annual revenue. This regulation adds to the already complex web of compliance for multinational CCOs who must ensure that digital policies align with both U.S. and local data privacy laws.

Data protection has become a critical compliance area as cyber threats rise globally, with the Middle East alone experiencing a 50% increase in cyber incidents targeting financial institutions over the past year, according to regional cybersecurity reports.

With Saudi Arabia emerging as a data compliance leader, CCOs and local compliance teams must build robust data governance frameworks to meet the region’s rising standards and protect against potential penalties.

On Public Policy

In this evolving landscape, CCOs will increasingly view collaboration with public policy and government affairs professionals as a lifeline in understanding the trajectory of U.S. foreign policy, particularly where regulatory changes might outpace internal compliance updates. Together, these teams can help anticipate potential impacts on trade routes, partnerships, and financial operations, providing executives with a clearer map for navigating shifting U.S. and regional policies.

With Washington likely to intensify sanctions enforcement, compliance officers can no longer afford to work in silos. A close-knit partnership with public policy offers early warning capabilities, helping CCOs forecast shifts in regulatory

attitudes and respond proactively. Where sanctions and export controls threaten to restrict business activities or transactions, government affairs teams can provide critical insight, advising on diplomatic and legal considerations that compliance teams might otherwise miss.

Get Ready Now

As the “America First” doctrine takes root once more, companies are expected to commit unprecedented resources to compliance functions that have long been underfunded or treated as reactive cost centers. The costs of enhancing trade sanctions and export controls functions will be considerable—investment in new technologies, expanded personnel, and extensive training will stretch many compliance budgets. Yet CCOs increasingly recognize that the alternative—fines, lost market access, and reputational damage—is simply too high a price to pay.

For local compliance professionals, this reinforcement promises to bring resources to the front lines, helping them keep pace with global demands while navigating the region’s unique political landscape. However, their work will be cut out for them. U.S. sanctions and trade policies will likely place Middle Eastern entities under greater scrutiny, demanding a high level of local expertise and a sensitivity to the political nuances that shape regulatory landscapes.

In an era of aggressive foreign policy and high-stakes trade restrictions, the relationship between compliance, public policy, and government affairs will prove indispensable. Through close collaboration, businesses can meet the demands of this new landscape, safeguarding their interests while adapting to the shifting tides of U.S. policy. For compliance teams across the Middle East, the challenge will be to remain flexible, well-informed, and resilient, no matter how turbulent the geopolitical waters become. ■

Ben Cockram is Managing Director, Major, Lindsey & Africa, London. Ben has deep, practical exposure to the Middle East & Africa markets, as well as the UK and Mainland Europe.