Our latest Refinitiv on-demand webinar sees a panel of experts discuss a changing sanctions landscape and delve into some key considerations for developing an effective sanctions screening programme.
- During the webinar, the experts looked at the ways in which the sanctions landscape is or has been changing and the impact on the financial industry, and key concepts organisations should consider when creating a screening programme.
- The webinar explored the latest global developments, including Brexit and U.S. Executive Order 13959, and the challenges they bring to the sanction compliance landscape.
- Also under discussion were practical solutions that can help organisations with their sanctions compliance.
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The sanctions landscape is complex and ever-changing, and non-compliance with sanctions regulations carries the dual risk of stringent financial penalties and reputational damage. This means that organisations need to be fully prepared to ensure that they have adequate controls in place to identify sanctioned entities and securities.
In our webinar, Ernst Pienaar, Head of Specialist Research, at Refinitiv World-Check, addresses the complexity of narrative sanctions in particular.
He says: “Narrative (implicit) sanctions apply to entities not sanctioned by name or appearing on a blocked or restricted entity list, but covered by a narrative statement on a sanctions programme which extends sanctions to such non-listed entities.”
Pienaar stresses that the sheer volume of narrative sanctions is often significant. For example, the ratio of numbers of explicit to implicit sanctions records in terms of sectoral sanctions against the Russian Federation stands at 5 percent (explicit) to 95 percent (implicit).
Key focus areas for programmes
Our webinar goes on to take a deep dive into the latest global sanctions developments and the impact of these developments on the financial industry, before looking at how companies can ensure that they are not dealing with sanctioned entities.
Further areas explored by the panel include:
What sanctions will look like as a result of Brexit
For companies operating across the EU and the UK, Brexit brings far-reaching implications that are likely to translate into a need for additional resources and the provision of training to address the changes and any potential inconsistencies.
The implications of recent China-related sanctions
These are defined as: “Any individual or entity the Secretary of Defense or the Secretary of the Treasury identifies as being owned or controlled by, or affiliated with, the People’s Liberation Army or a ministry of the government of the People’s Republic of China or that is owned or controlled by an entity affiliated with the defence industrial base of the People’s Republic of China; and engaged in providing commercial services, manufacturing, producing, or exporting.”
The sanctions risk relating to this is significant, and consequently a number of key EOs – over and above EO 13959 – have been released over the last year. Many carry a lengthy list of prohibitions, and organisations need to ensure that they fully understand the breadth and implications of these developments.
Kumar explains: “Once you start targeting large entities, along with investments in different countries, the narrative sanctions implications of such designations are extraordinarily complex.”
Practical solutions to ensure compliance
Loreta Liutkutė Habchi, Vice President, Head of Public Policy Europe, Western Union (W.U.) talks through the many challenges that surround sanctions compliance, and also touches on the W.U. approach to tackling these challenges.
She outlines three layers or levels of screening regularly employed at W.U. including:
- Review, screening and alert generation
- Transaction escalation
- Further investigation and the implementation of additional controls and due diligence where necessary
Liutkutė Habchi also speaks in depth about the Cuban situation and the changes that are anticipated as a result of the new U.S. presidency, concluding that this is an area that must be closely monitored in all sanctions screening programmes.
Key considerations for screening programmes
Trisham Chundunsing, Senior Manager Public Policy, Amazon, talks about the practical details of sanctions screening programmes, in particular covering some key concepts that organisations should keep top of mind. These include:
- Optimised regulatory compliance
- Cost of compliance considerations
- The customer experience
- The role of technology and innovation
- Regulatory metrics and collaboration
To hear an in-depth discussion around these and other topics relevant to the 2021 sanctions landscape, listen to our full on-demand webinar.