Refinitiv’s latest on-demand webinar, Navigating the Global Sanctions Landscape in 2022, sees a panel of experts discuss the highly dynamic sanctions landscape currently unfolding, before moving on to outline some key aspects of a best practice response for financial market players.
- As the complex and dynamic sanctions landscape is continuing to evolve, what are the key considerations for developing an effective sanctions screening programme?
- To meet the challenges posed by the implementation of global sanctions, financial services firms need high quality, up-to-date datasets that are constantly undergoing quality control checks.
- We are investigating practical solutions that can help organisations with their sanctions compliance. Read the blog and listen to the recorded webinar to learn more.
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Sanctions continue to dominate the geo-political landscape in the wake of the ongoing Russian-Ukrainian conflict: a host of countries – including the U.S., the UK, the EU, Canada, Australia, Japan, Singapore and Switzerland – implemented new sanctions following recent events.
Following this unfolding narrative, the first country to react was the UK, but the U.S. Treasury followed quickly, ramping up sanctions against the Russian Federation. Almost immediately thereafter, the EU introduced a substantial volume of sanctions, with other countries following suit.
These rapid changes came hot on the heels of 2021, when sanctions activity was also brisk: last year saw sanctions unfolding in response to developments in Myanmar; Hong Kong and China; and more.
This rapidly shifting landscape reminds us that the sanctions arena remains a high-pressure area, where changes can be swift and complex, and where significant fines for non-compliance are not unusual.
Moreover, this can be further complicated by the implementation of different types of sanctions.
Determining which entities are covered is governed by strict rules, the most well-known of which is the OFAC 50 percent rule, which states that “the property and interests in property of entities directly or indirectly owned 50 percent or more in the aggregate by one or more blocked persons are considered blocked”.
Given this complex and dynamic backdrop, sanctions compliance – although it may appear straightforward at first glance – is not always easy to achieve.
What global sanctions challenges do financial services face?
Financial services industry players need to have strong sanctions screening programmes in place if they are to remain compliant, but a number of pain points exist.
A case in point is where an individual may have more than one name.
Firms need to ascertain whether they are screening for all names and variations, including prefixes and/or suffixes. However, fuzzy matching techniques – while generally catching all variations – can quickly result in large numbers of false positives, with both cost and time implications.
In response to these challenges, compliance teams need to adopt a highly practical approach to screening and managing sanctions risk.
Specifically, they need to reduce the vast sanctions landscape down to relevant sanctions lists only. This, in turn, can only be done with confidence if they have access to quality, up-to-date datasets that are constantly undergoing quality control checks.
Best practice screening
Refinitiv’s World-Check data intelligence team can help firms ensure best practice in their sanctions screening and stay compliant in this fluid environment.
We employ a mix of technology and human expertise.
Automated systems monitor for ongoing developments, but our dedicated team performs manual checks of sanctions lists every day, and in some cases as often as every half an hour.
New sanctions and updates are first evaluated before relevant data is captured within the World-Check system. Thereafter, we assign an umbrella key word (e.g. OFAC), as well as sub keywords that provide additional information. We also include all sources of official documentation and ensure strict quality control before information is published to our client-facing systems.
With over two decades of experience, we are able to offer trusted, reliable data that is structured and de-duplicated to reduce noise, but more than this, we are highly cognisant of the time-sensitive nature of sanctions developments: in 99.9 percent of cases we can publish updates within 24 hours.
At Refinitiv, we anticipate ongoing uncertainty in the rapidly evolving sanctions space as the events of the first quarter of 2022 continue to play out. We will be working hard to ensure that our sanctions content remains broad and accurate to best support our customers in these challenging circumstances.