Sanctions and Export Controls Compliance

Sanctions and Export Controls Compliance

Sanctions Overview

Types of Sanctions

• Comprehensive: Full prohibition (e.g., North Korea, Iran)
• Targeted/Selective: Specific individuals/entities
• Sectoral: Specific industries or activities
• Secondary: Affect non-US persons dealing with sanctioned parties

Key Sanctions Authorities

| Jurisdiction | Authority | |--------------|-----------| | US | OFAC, BIS | | EU | European Commission | | UK | OFSI | | UN | Security Council |

Sanctions Compliance Program

1. Governance

• Senior management commitment
• Designated compliance officer
• Board oversight
• Clear policies and procedures

2. Risk Assessment

• Product/service risk
• Customer risk
• Geographic risk
• Transaction risk

3. Screening

When to Screen:

• Customer onboarding
• Transaction processing
• Ongoing/periodic
• Trigger events

What to Screen Against:

• SDN List (OFAC)
• Consolidated List (EU/UK)
• Sectoral sanctions lists
• PEP lists
• Adverse media

Screening Considerations:

• Fuzzy matching thresholds
• Alert disposition
• False positive management
• Documentation

4. Transaction Monitoring

• Cross-border payments
• Trade finance
• Correspondent banking
• Vessel tracking (for shipping)

5. Reporting and Recordkeeping

• Blocked property reports
• License applications
• 5-year retention minimum

Export Controls

Overview

Controls on export of goods, software, and technology based on:

• Product classification
• End user
• End use
• Destination

US Export Controls

• EAR: Commercial and dual-use items (BIS)
• ITAR: Defense articles (DDTC)
• NRC: Nuclear materials

Key Compliance Elements

• Product classification
• License determination
• End-user screening
• End-use verification
• Record keeping
• Self-disclosure of violations

Compliance Challenges

• Multiple jurisdictions
• Frequent list updates
• Complex ownership structures
• Evasion techniques
• Technology changes

Best Practices

• Automated screening tools
• Regular list updates
• Escalation procedures
• Training programs
• Third-party due diligence
• Audit and testing