By Adam Turteltaub
Managing economic sanctions compliance is a hot topic these days. The US Department of the Treasury’s Office of Foreign Assets Controls (OFAC) just released a new Framework for OFAC Compliance Commitments. At the same time, the picture for Iranian sanctions seems to be changing daily.
To help understand the issue, we sat down for a podcast with Kevin Braine, Kroll’s Regional Managing Director EMEA, Compliance Risk & Diligence.
He explained that both the US and EU have been active in issuing sanctions, but that the US has proven a more active regulator, with very severe economic consequences possible for those who run afoul of sanctions regimes.
Making matters more complex is that the sanctions may apply both to individuals (people and companies) and entire sectors. In addition, there can be differences in sanctions regimes between the US and EU, with the EU (when we recorded this but that may have changed by the time you listen) taking a softer stance on Iran. France has even offered to compensate French companies for doing business with Iran if fined by the US.
To get a handle on the issue, understand where the US and EU stand on Iran and Russia. In addition, know the sanctions regimes of other countries where your firm does business, Braine warns. It’s also crucial to know who is the ultimate beneficial owner (UBO) of organizations you do business with. That can be a great challenge in many countries, where ownership is opaque either intentionally or due to paper-based systems.
Bottom line: listen in, and tread carefully in the realm of sanction.