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...

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...

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 Department of Justice secured a guilty plea from NatWest Markets, the newly-named Royal Bank of Scotland, for trade manipulation, referred to as “spoofing,” in U.S. Treasury markets. The NatWest resolution reflected new changes in DOJ’s white collar enforcement policies, including acknowledgement and consideration of NatWest’s prior misconduct (criminal and civil) and appointment of an independent compliance monitor. NatWest was not offered a deferred or non-prosecution...

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...