Sanctions Uncovered – Are you protecting yourself?
29 Jul 2015 10:14 am by Mark Dunn
With the recent burst of OFAC fines issued to businesses sanctions represent a very real and potentially damaging area for any business trading internationally.
Recent cases include the New York Branch of National Bank of Pakistan, who received a total fine of $55,952.14 for wire transfers that the bank had made to entities on their list of Specially Designated Nationals. The bank blamed the misconduct on a software failure, meaning they could have been avoided if the bank's sanctions compliance software had alerted them that Kyrgyz Trans Avia, an airline in Bishkek, Kyrgyzstan, was on OFAC's sanctions lists.
Paypal's screening process had similarly let them down in March of this year, exposing them to a huge £5M fine from the US Treasury Department after they had allowed payments which violated sanctions by allowing a total of 136 transactions in the account of Kursad Zafer Cire, a Turkish man on the US State Department's list of weapons of mass destruction proliferators.
The long reach of OFAC
In the same week, OFAC had also issued John Bean Technologies (JBT) with a $391,950 fine for violating US anti-nuclear proliferation sanctions. JBT, a maker of aircraft ground support equipment, had been involved in a shipment aboard a blocked vessel on the Islamic Republic of Iran Shipping Lines (IRISL). If JBT's senior management had voluntarily self-disclosed the misconduct, OFAC could have established a base penalty fare for the company for violations of their regulations. JBT were aware that dealing with IRISL was unlawful and, after the US bank rejected the trade documents, JBT were therefore subject to a substantially greater civil penalty.
How covered are you?
The international sanctions regime is a dynamic and rapidly changing area which continues to develop outside the compliance programme and overlaps jurisdictions, geography and national borders. Sanctions affect every area of a firm's compliance process from risk assessment, policies and procedures, through internal and external data systems and controls to case management and modelling.
Is your compliance process robust enough to help mitigate this risk? Find out how to stay out of the risk zone with some top tips in the LexisNexis Sanctions Uncovered magazine.
- EU updates its sanctions best practises document
- Paypal issued £5M fine due to inadequate sanctions screening process
- Sanctions 101: An introduction
ps 3 ways you can apply this information right now to…
- To protect your business and reputation you need to better understand your customers, employees and vendors. Lexis Diligence brings together all the intelligence you need in one place to conduct consistent due diligence and comply with anti-money laundering and anti-bribery regulatory requirements.
- Keep up to speed on developing news and expert opinion with our regular posts on Anti-Bribery & Corruption; subscribe to our blog to have updates delivered directly to your inbox.
- Leave a comment below. Let's start a conversation!