June 27, 2023

Looking out at the financial world from our perspective we do see a fair amount of attention to CDD and AML – specifically payment service providers and cryptofirm are catching up – but the topic of sanctions is still top of mind for many firms and compliance officers.
On one hand this has to do with the invasion of the Ukraine by Russia and the ongoing international response to it. On the other hand – since the sanctions have been in place for a while – we see more analyses of the effectiveness of the sanctions.

To start with the first element, Australia for instance just issued new, or if you wish more refined, regulations on trade with Russia or Ukraine territory occupied by Russia. You can read the full story here,  but it’s just 1 regulator adding to the pletora of regulations already in place. Regulators the world over are continuously (re)evaluating their stance on countries, regions, organisations and individuals and adapting their regulations.
For individual companies – bear in mind we’re not only thinking of financial institutions here but also logistics, trading, shipping companies and many more – this means that’s it imperative to keep track of all regulatory changes.

Subsequently all the regulations need to be translated into internal policies and procedures and need to be rolled out to all relevant staff in the organisation. That might be easy and straigthforward but maybe it’s not… in particular for companies with exposure to countries that not follow US or EU sanctions this might be a puzzle and will need a risk-based approach.
Once all that is done, staff will need to undergo (role based) training. That’s an important point; when we talk or write about training we don’t just mean any off-the-shelf generic course. We mean training in local regulations, sometimes even local language and detailed company policies leading to a proper knowledge of the subject matter so staff know what to do in their day-to-day job and in contact with customers.

The other element we mentioned is the effectiviness of sanctions. Maybe that looks like an academic discussion for regulators, but it’s mostly driven by how organisations the world over are implementation the various sanctions regimes. The Rotenberg Files for instance – a series of articles based on a new leak of over 50,000 emails and documents from a Russian management firm that worked for the Rotenberg brothers, provides some unique insights https://www.occrp.org/en/rotenberg-files/. Regulations are not preventing anything, it’s how organisations implement these that determine the effectiviness of it all.

Over the last months and years we’ve done a lot of work on training and implementation of sanctions frameworks. So if you would like to learn more, share your requirements or have an open discussion or the state of your AML/CFT framework and training approach you know where to find us.