The task of designing appropriate third-party sanctions controls requires reverse engineering of relevant caselaw, particularly, the Epsilon Electronics case, which I reviewed in Part I of this series, and the Department of Treasury’s Office of Foreign Asset Control (“OFAC”) sanctions regulations. It is one thing to detect and prevent situations where a company actor has “actual knowledge” that a shipment to a third party is...
If there is one issue that is repeated over and over (and over), it is third-party risks. Over the last ten years, we have witnessed an explosion in anti-corruption enforcement around the world. And with this enforcement focus, it was inevitable that third-party risk would become one of the core areas for ethics and compliance programs. Indeed, the importance of third-party risk is underscored by...
OFAC is off to a quick start in 2022. After announcing its Airbnb enforcement action in the beginning of January, OFAC announced a settlement with Sojitz (Hong Kong) Limited, a Hong Kong, China-based company that engages in offshore trading and cross-border trade financing, for $5,228,298 for violations of the Iran Sanctions Program. Sojitz HK violated the Iran Sanctions Program by making U.S. dollar payments through...
One of my favorite New Year postings is under the title of “Person” of the Year. In the past, I have singled out the Chief Compliance Officers, Chief Ethics Officers, Prosecutors, and Whistleblowers. For 2021, the choice is obvious – the most important trend is the rise of Environmental, Social and Governance (“ESG”) programs. In second place, I would choose Supply Chain Management and Risks,...
President Putin is making sure that Russia dominates the early 2022 headlines. As Russia aligns its resources to invade Ukraine, the U.S. and European countries prepare to respond aggressively. It appears that nothing will deter President Putin from continuing forward. Russia has calculated that the risks and response from the West may be worth the upside to Russia. Global companies should prepare for an aggressive...
The Treasury Department’s Office of Foreign Asset Control started off the new year with an interesting enforcement action against Airbnb Payments, Inc. (“Airbnb”), a money service business subsidiary of Airbnb, Inc. Airbnb agreed to pay $91,172.29 for violations of OFAC’s Cuban Sanctions Program. Airbnb discovered the violations as a result of a proactive forensic review that was approved by OFAC. Given the number of records...
The success of an ethics and compliance program depends on the support of internal partnership functions – human resources, security, IT, legal, finance, procurement, ESG and others. Given this reality, ethics and compliance has a variety of “seats at the table.” As a result, ethics and compliance has the opportunity to build important partnerships and influence the overall corporate governance framework. The last five years...
The Treasury Department’s Office of Foreign Asset Control (“OFAC”) has been a steady performer in this challenging pandemic environment. Since the pandemic, OFAC has maintained a strong profile, while managing a difficult portfolio of economic sanctions. The last two administrations have relied on robust sanctions programs to leverage foreign policy interests. With the ongoing tension between the US and China and Russia, OFAC is going...
Choose to be optimistic. It feels better.” – Dalai Lama Forgive me for my optimism. It is the only way to live a meaningful life. Or as some would say – being a pessimist is too much of a burden. We begin a New Year — and I am optimistic. To turn the corner here on relevance, ethics and compliance professionals, are by definition, optimists. Give...
This was a strange year. Not just because of the continuing pandemic and economic disruption. The Biden Administration took over after an unusual and delayed transition. The apparatus of government was slow to transition. Compounding this disruption, the government had to maintain a singular focus on the pandemic. As a result, the wheels of government moved in strange ways, often with delays. The Biden Administration’s...
