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COMPLYING WITH SANCTIONS, SDNs & TRADE EMBARGOES Wednesday, October 9 th , 2013 1 :00pm – 2 :00pm. BORIS POPULOH Sr. Vice President Willis Relocation Risk Group. SANCTIONS: TODAY’S AGENDA. What Are Sanctions Who Issues Sanctions Sanctions Type & Scope
Sr. Vice President
Willis Relocation Risk Group
What Are Sanctions
Who Issues Sanctions
Sanctions Type & Scope
SDNs (Specially Designated National)
Who Must Comply with Sanctions
- Global Insurance Broker (NYSE:WSH)
- Founded in 1828
- London / New York HQ
- 21,000 Employees / 415 Offices / 130 Countries
- $3.48 Billion Revenue (2012)
- 65,000 + Global Commercial Clients
- 45% UK FTSE 100 / 40% Fortune 500
- Place $38 Billion of Clients Premium AnnuallyintoInsurance Marketplace
- Only Global Broker with Mobility Practice Group (Willis Relocation Risk Group)
TRADE RESTRICTIONS ECONOMIC PROTECTIONISM
TRADE SANCTIONS ECONOMIC PENALTIES
Sanctions are “domestic” measures and/or penalties applied by one country on another with the purpose of controlling, prohibiting or restricting financial or trade activity of persons, entities and governments in order to achieve policy objectives.
United Nations (UN) Resolutions can result in sanctions. If you live in a UN member state you are likely to be subject to UN Sanctions.
WHO ISSUES SANCTIONS?
Any country can impose unilateral sanctions on any other territory. They are referred to as DOMESTIC sanctions.
The European Union* (EU) also issues sanctions which are enforced by each EU member state
In the United States sanctions are issued by the Office of Foreign Asset Control (OFAC)
* EU Member States: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom.
OFAC: Specially Designated Nationals
US citizen (wherever you are working)
US permanent resident
Non-US citizen doing business in or from the US(if you are on holiday picking up emails or making calls from the US)
If you work for a US company or a subsidiary owned by a US parent company
- Afghanistan - Egypt - Rep. Guinea-Bissau
- Belarus - Eritrea - Rep. of Guinea
- Burma (Myanmar) - Federal Rep. of Yugoslavia & Serbia - Somalia
- Congo, Democratic Rep. of - Iraq - Tunisia
- Ivory Coast (Cote d’Ivoire) - Lebanon - Yemen
- Democratic Rep. of Congo - Liberia - Zimbabwe
Over time list will change as certain sanctions are lifted, or new countries become subject to sanctions.
In addition, the scope of sanctions against these countries can change.
sanctions imposed against Syria have become significantly broader in recent years
sanctions against Burma have eased and mostly been lifted
Specially Designated Nationals list (the “SDN List”).
- members of certain current/former governmental regimes
- designated terrorists and terrorist groups
- organizations narcotics traffickers
- weapons proliferators
- persons involved in the black-market diamond trade
- a large number of vessels
LARGE LIST (5730 Entries)60 Vessels Added50 Amended DetailsIncreased Risk for Shippers
It is a criminal offence for a US person to make funds directly or
indirectlyavailable to individual,entities or groups listed in the
Specially Designated National List.
Larger number of SDN’s
ALBANIA, BANGLADESH, BOSNIA, CAMBODIA, COLUMBIA,
GHANA, KOSOVO, KUWAIT, MEXICO, PAKISTAN AND
US persons are also prohibited from dealing with any entity which is 50% owned by an SDN.
Attempts by a US person, or persons within the US to evade sanctions
Attempts by a US person to make funds directly or indirectly available to entities or individuals on the “SDN List”
US person investing in a company that is an SDN or that is owned or controlled (50%) by an SDN
The facilitation and approval of transactions by third parties involving SDNs is prohibited
It is a crime for any person (US or not) to conspire to cause a US person to contravene OFAC in any way
Under certain sanction regimes a individual can be found guilty of a sanction breach even if that individual did not know the transaction was prohibited
Possible Responses to Apparent ViolationsNo Action
Initiate an Investigation
Request further information from the potential violator
Issue a Cautionary Letter
Find that a Violation Occurred (Non-Monetary)
Issue a Civil Monetary Penalty
Suspension of Operating License
Issuance of a Cease and Desist Order
Refer the case for Criminal Prosecution
Requested Information MUST be Provided
$50,000.00 Penalty / Violations valued at more than $500K
Broad Subpoena Power. “Every person is required to furnish under oath… at any time as may be required… complete information relative to any transaction…
… or relative to any property in which any foreign country or any national thereof has any interest of any nature whatsoever, direct or indirect.”
Civil & Criminal Penalties
Criminal Penalties -up to $1 million per violation-up to 20 years in prison
Confiscation of company’s assets
Regulatory Enforcement Action
Severe Reputational Damage
IT IS IMPORTANT TO GET THIS RIGHT!
1. Willful or Reckless Violation of Law
2. Awareness of Conduct at Issue
3. Harm of Sanctions Program
4. Individual Characteristics of Violator(s)
5. Remedial Response
6. Cooperation with Investigating Agency
1. Voluntary Self-Disclosure
2. Effective export compliance program
3. Violation was isolated occurrence
4. License would have been issued
5. Cooperating with Agency
Risk Management Tool
- Formal Program
- Increasingly Important to Clients/Customers - Multinationals - 3rd Parties - Relocation Networks
START to FINISH
My Country does not impose Sanctions on TerritoriesListed
I am not a US Person
IT DOESN’T MATTER!
Sanctions regimes are incredibly complex, and given the international nature of the Int’l HHG Transportation and Relocation Industry as well as the clients we serve, the act of transporting goods and related processes can sometimes impact transactions in unexpected and unforeseen ways.
Boris PopulohWillis Relocation Risk Groupboris.email@example.com