Understanding your firm’s sanctions risk

Sanctions

The key to staying on the right side of regulators is understanding your organization’s exposure to sanction risk.

Thomson Reuters World-Check Sanction Set (1:57)

Identifying and mitigating sanction risks

Regulated organizations need to ensure they comply with sanctions regardless of where they may operate in the world. An informed approach allows organizations to focus resources on and tailor systems and controls to where business is most likely to encounter sanctioned parties.

There is a wide range of sanctioning bodies operating in varying regions today. Perhaps the best-known are the U.S. Treasury’s Office of Foreign Asset Control (OFAC), the United Nations Security Council, and the European Union.

In an ever-evolving and complex sanction landscape, organizations need to be able to identify where the real risks lie.

Keeping track of the evolving risk landscape

Since 9/11, the landscape has become more complex –  the introduction of countering the financing of terrorism (CFT) focused sanctions, the non-proliferation of weapons of mass destruction regime, and in 2010, the introduction of Comprehensive Iran Sanctions Accountability and Divestment Act (CISADA).

In 2014, the U.S. and the European Union, along with a number of other countries, placed economic sanctions on Russia. The so-called U.S. “sectoral” ones against the Russian Federation focus on specific critical aspects of the economy and target specific entities in those sectors, most of which are state-owned.

On June 30, 2014, OFAC amended the Burmese Sanctions Regulations, easing certain dealings with respect to U.S. citizens and businesses. In January 2015, the U.S. enacted new travel and trade regulations for Cuba. In January and March 2016, the U.S. further eased trade and travel restrictions on Cuba. A final agreement called the Joint Comprehensive Plan of Action (JCPOA) between Iran and the P5+1 countries came into effect in July 2015, following two years of negotiations.

On January 16, 2016, the U.S. lifted nuclear-related sanctions following the International Atomic Energy Agency, certifying that Iran had taken steps to limits its nuclear activities under July 2014 JCPOA.

Dealing with multiple sanction regimes

Depending on which jurisdiction your organization is active in, you may be obliged to comply with the requirements of multiple regimes. Some jurisdiction requirements may also apply without an organization having an actual presence in that region.

Opaque ownership structures are challenging

Since August 2014, OFAC has aggregated ownership stakes of all blocked persons when determining whether an entity should be blocked (sanctioned) in accordance with OFAC’s "50 Percent Rule." Identifying these relationships is a burdensome task for regulated organizations, primarily when those sanctioned individuals and companies try to obscure the ownership through multiple-layered structures.

The implementation of an agile compliance program is crucial for avoiding regulatory censure, penalties, and subsequent reputational damage.

Features and benefits

Up-to-date information
Thomson Reuters monitors regulatory changes across all regions and publishes updates, working across all time zones ensures that all our sanction and watch list data is up-to-date.
Connections to sanctioned parties
The World-Check database includes more than 10,000 profiled individuals and entities directly connected to and/or associated with sanctioned parties not found on sanction lists.
Opt-in data-sets for in-transit processing
The sanction data-sets (combined or stand-alone) contain only information that appears on the sanctioning body lists, delivered in uniform, structured format. Providing fast, reliable screening against key sanction lists, offer the ability to select lists relevant to the transaction.
Iran database
A dedicated database of known individuals and entities linked to parties conducting business with Iran, it assists organizations in measuring their sanction risk exposure.
Specific entity risk data
Covering over 1 million entities across approximately 250 markets with complete cross asset integration, in addition to specific data for uncovering any association to entities subject to Russian sanctions.

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