Economic sanctions enforcement is a fast-rising risk for global companies. For many years, the Treasury Department’s Office of Foreign Asset Control (“OFAC”) focused primarily on financial institutions. Over the last ten years, OFAC has stretched its enforcement eyes towards software, manufacturing, telecommunications and technology companies. With this growth in sanctions enforcement, OFAC has embraced an aggressive view of third-party risks. Like the FCPA, under OFAC’s regime, third parties...

Jessica Sanderson, Partner at The Volkov Law Group, joins us for a blog posting on how to prepare for possible Russia sanctions in the event Russia invades the Ukraine. Jessica can be reached at [email protected]. Compliance Professionals: As the Ukraine braces for a possible Russian incursion, are you bracing for the impact of economic sanctions against Russia? In this article we offer suggestions to help...

Chief compliance officers have a difficult job (to say the least).  If everything goes well, they are hailed as heroes.  If a major problem occurs, everyone looks to the CCO to find out why the problem occurred.  In the latter situation, the implicit message to CCOs is “why didn’t you prevent this problem, I thought you were supposed to prevent this.”  This reflects a fundamental...

Facing the myriad third-party sanctions risks can be daunting.  Many global organizations rely on a network of third-party intermediaries that pose a variety of risks.  To mitigate those risks, companies have to implement practical steps tailored to the specific risks. Let’s start with some basic compliance requirements.  Initially, as part of the onboarding process and assignment of a sanctions risk category, global organizations have to...

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...

One of my favorite New Year’s reviews is under the title of “Person” of the Year. In the past, I have singled out 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, given the...

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...