Building an effective US-UK sanctions compliance programme: What are the key components?

Rita D. Mitchell, David Mortlock and Simon Osborn-King
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Rita D. Mitchell: Partner, Willkie Farr & Gallagher, UK
David Mortlock: Chair, Willkie Farr & Gallagher, USA
Simon Osborn-King: Partner, Compliance, Investigations & Enforcement Practice, Willkie Farr & Gallagher, UK

Journal of Financial Compliance, 2019, vol. 3, issue 2, 171-180

Abstract: Economic and trade sanctions are political tools used to further government objectives, typically to seek to change or modify the behaviour of the target country’s regimes, or particular individuals or groups, based on foreign policy and national security goals. In recent years, we have observed a dramatic increase in the use of sanctions by the European Union (EU) (and by extension the United Kingdom) as well as the United States, indicating a foreign policy shift that continues to create challenges for businesses subject to EU, UK and US sanctions regimes. In the United Kingdom, the Financial Conduct Authority (FCA) expects regulated entities to tailor their systems and controls to mitigate the risk of financial sanctions violations. In the United States, the Office of Foreign Assets Control (OFAC) encourages a risk-based approach to sanctions compliance. There is no one-size-fits-all approach. Nevertheless, on the basis of a review of the applicable legislation, regulations, guidance from the authorities, policy statements, and observations from recent enforcement actions as well as our own advisory work in this area, there are certain key components that every sanctions compliance programme should contain. This paper will briefly set out why having an effective sanctions compliance programme is necessary. We will then discuss expectations by regulators and enforcement authorities as to what constitutes an effective sanctions compliance programme, and, finally, explore how companies can seek to meet and manage these expectations from a cross-border perspective.

Keywords: sanctions; compliance; OFAC; Magnitsky; OFSI; best practices; JMLSG; screening; risk analysis; financial crime; AML; KYC (search for similar items in EconPapers)
JEL-codes: E5 G2 K2 (search for similar items in EconPapers)
Date: 2019
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