Sanctions: A Practical Perspective

Presentation to the ACAMS Cyprus Chapter 13 October 2016

Samantha J SheenAML Director - Europe, ACAMS

Presentation Outline

1. Introduction2. Current Challenges3. Mitigation of Sanctions Compliance Risks4. Regulatory Expectations5. Effective Screening Practices6. Key Takeaways

Part 1 - Introduction

Image: Magazine.owen.vanderbilt.edu

Types of EconomicSanctions:

• Diplomatic• Travel• Trade• Financial

• **Exemptions &

LicensedActivities

Part 1 - Introduction

Key Characteristics• Extraterritorial

Application (e.g. USA)• Prohibitions and

Restrictions• No minimum £

Thresholds• Immediate Effect

Image: Magazine.owen.vanderbilt.edu

Part 2 – Challenges

Ever-ChangingScope

• Iran• Cuba• Russia/Crimea• Myanmar• Cote I’voire• Disparity between

Sanction ListsImage: Animalia-life.com

Part 2 – ChallengesAvailable Data

• Legacy Systems• Changing customer data• Limited Customer Due Diligence Information

Image: henridomain.com

Part 2 – Challenges

Transparency• Ownership/Controllership• “Nature and Purpose”

Images: SEC.com

Part 2 – Challenges

Internal Communication and Prioritisation

Image: thedigitalattitude.com

Part 3 – Mitigation

Image: Medinaquality.com

Customer Due DiligenceOngoing Monitoring/ Assurance

Part 4 – Regulator Expectations

Part 5 – Effective Screening

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Part 5 – Effective Screening

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Screening Calibration

Image: pixabay.com

Part 5 – Effective ScreeningScreening Scope

• Parties and countries relating to:– Customers– Controllers– Beneficiaries– Counterparts– Vendors– Goods and Services– Vessels (along with shipment routes)

Part 5 – Effective ScreeningWhen to Screen

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Part 5 – Effective Screening

European CouncilCouncil of the European Union

Beneficial Ownership

Part 5 – Effective ScreeningAutomated Screening Process

Part 5 – Effective Screening AL-JABBARI, Deiman Alhasenben Ali (a.k.a. IZZAT,Dieman Abdulkadir), Adolf-Braun Street 6, Nuremberg90429, Germany; Fuerther Street 335, Nuremberg,Germany; Nuremberg Prison, Germany; DOB 04 Jul1965; POB Kirkuk, Iraq; nationality Iraq; TravelDocument Number A0141062 (Germany) (individual)[SDGT].

Verification

Part 5 – Effective Screening Organisation Name: SIMATEC DEVELOPMENTCOMPANYOther Information: EU listing. Not UN. Assisting designated entities to violate the provisions ofUN and EU sanctions on Iran. As of early 2010 Simatecwas contracted by UN-designated Kalaye ElectricCompany (KEC) to procure Vacon inverters to poweruranium enrichment centrifuges. As of mid-2012Simatec was attempting to procure EU-controlledinverters.

Verification

Part 5 – Effective Screening

Verification – Dual Use Goods

Part 5 – Effective ScreeningUse of Internal Lists

Exclusion Lists Inequalities or“White” Lists

Part 3 – Effective Screening

WorkflowsRecords Management

Source: business.lovetoknow.com

Part 3 – Effective Screening

TrainingEffectiveness Feedback Cycle

Key Takeaways•The sanctions landscape is constantly changing•There continue to be challenges•Key controls are CDD and monitoring andassurance•Regulatory expectations continue to increase•Effective screening comprises of a number offeatures•To remain effective, lessons learnt should beincorporated into training and system reviews.

Thank-you for ListeningAny Questions?

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Learn more about ACAMS SanctionsCompliance Certificate at:http://www.acams.org/sanctions-compliance-training/