Simplifying global sanctions compliance through technology

Corporate compliance officers have to manage an increasingly complex sanctions environment. Keeping track of the restrictions placed on governments, companies, institutions and individuals by other jurisdictions is becoming more challenging. Nevertheless, it’s vital that companies keep on top of these changes. Failure to do so can result in substantial financial penalties and reputational risk, even for accidental transgressions.

The digital integration of the world has deepened these challenges. High-speed, cross-border data networks are redefining the definition of jurisdiction. This means compliance officers must carefully monitor, not only their company’s real-world activities, but also those conducted digitally.

Take the example of Société Internationale de Télécommunications Aéronautiques (SITA). The air transport IT and communications specialist was alleged to have breached the U.S.’s Global Terrorism Sanctions Regulations, even though the activity under investigation didn’t take place on American soil or involve an American entity. Because the activity was conducted digitally, through networks that ran through the U.S. and involved U.S. origin software and servers, the Office of Foreign Assets Control (OFAC) determined SITA’s activities were subject to U.S. jurisdiction. SITA settled for almost $8 million.

This introduces a whole new level of due diligence for compliance officers because even if they feel they have no connection to the United States, they actually might. Ensuring compliance may include knowing where the cloud data is stored, where the electronic message hub resides, and the origin of any software being used.

As if the complexity of sanctions was not enough, the volume of sanctioned entities and programs continues to increase, sometimes on what feels like a weekly basis. It’s critical to have in place a trusted, automated compliance program that is updated in real time using the highest-quality data since each time a new entity is sanctioned the overworked compliance officer, needs to assess the impact which requires a lot of research, resources and time. The burden on financial firms of quickly assessing the risk to securities before they are traded can be overwhelming.

For that reason, Bloomberg’s Enterprise Data solution has been tooled to automatically perform the crucial tasks, beginning with the identification of who and what is sanctioned.

Embedded in companies’ workflow systems, the suite is driven by Bloomberg’s industry-leading and up-to-the-minute data sets that also take into account ownership, corporate structure and actions intel. It’s keyed into the daily sanctions situations of 10 global jurisdictions, including the U.S, U.K. EU, UN, Canada, Switzerland, Japan, Australia, Hong Kong, and Singapore, so that the status of tradable assets and legal entities in the world’s leading markets can be constantly monitored.

And with the backing of a team of regulatory experts, Bloomberg’s Enterprise Data helps to simplify compliance within multiple jurisdictions and their unique requirements.

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