Season 10, Episode 8: Ongoing Ukraine war, global tensions add export controls to sanctions compliance complexity
Compliance Clarified – a podcast by Thomson Reuters Regulatory Intelligence
Introduction
Explore how Russia is navigating sanctions and exploiting loopholes amidst the war in Ukraine, shedding light on the challenges faced by financial services firms and businesses dealing with high-risk entities.
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In this episode Rachel Wolcott, senior editor, welcomes special guest Justine Walker to the podcast. Justine is the Association of Certified Anti-Money Laundering Specialists' (ACAMS) global head–sanctions, compliance, and risk and its vice-president for thought leadership. She is an expert on sanctions, counterterrorism, and financial crime she has held specialist positions within the UK's Financial Conduct Authority, HM Treasury, the United Nations Office on Drugs and Crime and UK Finance.
Russia's invasion of Ukraine in 2022 ushered in a new set of unprecedented sanctions, including the imposition of a novel oil price cap, meant to stop Russia selling oil above $60 a barrel. But Russia seems to be able to get everything it needs to keep the war going. Justine expects enforcement action to unfold as the year progresses.
"We're entering into a much more aggressive phase regarding the price cap, we've got new price capacitation requirements, we've had a flurry of new guidance. We're probably going to see this play out in terms of more enforcement, and I think this year is going to be pretty informative in terms of how the oil price cap will end up being in terms of a longer-term tool," Justine told Compliance Clarified.
Justine emphasized the importance of Executive Order 14114, signed last year by President Biden, which ratchets up secondary sanction risk for non-U.S. financial institutions which give direct support to Russia's military-industrial base but also for indirect assistance, such as facilitating customers' dealings or providing services to customer transactions related to Russia's military-industrial base.
Justine explained the convergence of export controls with anti-money laundering (AML) and sanctions compliance. She emphasized the need for financial institutions to be proactive in identifying sensitive technologies and strategic trade, which are increasingly becoming a focus for the Group of Seven governments.
"One of the big challenges is this merger between export control requirements, AML and sanctions. There's been more of a nexus between AML and sanctions, but the nexus with export controls has not been there to what we're now seeing is being asked. We're seeing much greater expectations from governments, that financial institutions will become more proactive in their thinking around their role in sensitive technology, strategic trade, export control, and that is a whole area of speciality in itself" Justine said.
Links:
ACAMS's Global Threat Report: https://www.acamstoday.org/global-afc-threats-report/
INSIGHT: Latest U.S. warnings to foreign banks doing significant Russia business may herald sanctions
enforcement action
Inside Paywall: http://go-ri.tr.com/3ZIw6B
Outside Paywall: https://regintel-content.thomsonreuters.com/document/I899083B0DCA811EE925AD4411E508A2D/INSIGHT:-Latest-U.S.-warnings-to-foreign-banks-doing-significant-Russia-business-may-herald-sanctions-enforcement-action-07-03-2024
U.S. targets Russian "malign activities" linked to Wagner Group in Central African Republic: https://regintel-content.thomsonreuters.com/document/I87D16B80DD8D11EE985CDDFFB3F5522A/U.S.-targets-Russian-'malign-activities'-linked-to-Wagner-Group-in-Central-African-Republic-11-03-2024
EU sanctions: new rules to crack down on violations | News | European Parliament: https://www.europarl.europa.eu/news/en/press-room/20240308IPR19002/eu-sanctions-new-rules-to-crack-down-on-violations
Previous episodes:
Season 10, Episode 5: How Mekong region organized crime built a global cryptocurrency money laundering network: https://podcasts.apple.com/gb/podcast/season-10-episode-5-how-mekong-region-organized-crime/id1548510826?i=1000646371712
Season 9, Episode 8: Hamas, terrorist financing and the U.S. response to the 7 October attack: https://podcasts.apple.com/gb/podcast/season-9-episode-8-hamas-terrorist-financing-and-the-u/id1548510826?i=1000635015943
Series 9, Episode 3: North Korea, Russia, crypto and changing attitudes to sanctions in Asia: https://podcasts.apple.com/gb/podcast/series-9-episode-3-north-korea-russia-crypto-and/id1548510826?i=1000631061413
Contact us:
Rachel.wolcott@thomsonreuters.com
More information about Thomson Reuters Regulatory Intelligence: https://legal.thomsonreuters.com/en/products/regulatory-intelligence
Compliance Clarified is a podcast from Thomson Reuters Regulatory Intelligence.
Listen to wide-ranging, insightful discussions on all things compliance for financial services firms. We delve into the hot topics of the day, the challenges faced and offer up practical ideas for emerging good practice. We de-mystify regulation and explore the art, as well as the science, of the ever-expanding role of the compliance officer. Enforcements, digital transformation, regulatory change, governance, culture, conduct risk – anything and everything impacting the compliance function is up for discussion.
Russia's invasion of Ukraine in 2022 ushered in a new set of unprecedented sanctions, including the imposition of a novel oil price cap, meant to stop Russia selling oil above $60 a barrel. But Russia seems to be able to get everything it needs to keep the war going. Justine expects enforcement action to unfold as the year progresses.
"We're entering into a much more aggressive phase regarding the price cap, we've got new price capacitation requirements, we've had a flurry of new guidance. We're probably going to see this play out in terms of more enforcement, and I think this year is going to be pretty informative in terms of how the oil price cap will end up being in terms of a longer-term tool," Justine told Compliance Clarified.
Justine emphasized the importance of Executive Order 14114, signed last year by President Biden, which ratchets up secondary sanction risk for non-U.S. financial institutions which give direct support to Russia's military-industrial base but also for indirect assistance, such as facilitating customers' dealings or providing services to customer transactions related to Russia's military-industrial base.
Justine explained the convergence of export controls with anti-money laundering (AML) and sanctions compliance. She emphasized the need for financial institutions to be proactive in identifying sensitive technologies and strategic trade, which are increasingly becoming a focus for the Group of Seven governments.
"One of the big challenges is this merger between export control requirements, AML and sanctions. There's been more of a nexus between AML and sanctions, but the nexus with export controls has not been there to what we're now seeing is being asked. We're seeing much greater expectations from governments, that financial institutions will become more proactive in their thinking around their role in sensitive technology, strategic trade, export control, and that is a whole area of speciality in itself" Justine said.
Links:
ACAMS's Global Threat Report: https://www.acamstoday.org/global-afc-threats-report/
INSIGHT: Latest U.S. warnings to foreign banks doing significant Russia business may herald sanctions
enforcement action
Inside Paywall: http://go-ri.tr.com/3ZIw6B
Outside Paywall: https://regintel-content.thomsonreuters.com/document/I899083B0DCA811EE925AD4411E508A2D/INSIGHT:-Latest-U.S.-warnings-to-foreign-banks-doing-significant-Russia-business-may-herald-sanctions-enforcement-action-07-03-2024
U.S. targets Russian "malign activities" linked to Wagner Group in Central African Republic: https://regintel-content.thomsonreuters.com/document/I87D16B80DD8D11EE985CDDFFB3F5522A/U.S.-targets-Russian-'malign-activities'-linked-to-Wagner-Group-in-Central-African-Republic-11-03-2024
EU sanctions: new rules to crack down on violations | News | European Parliament: https://www.europarl.europa.eu/news/en/press-room/20240308IPR19002/eu-sanctions-new-rules-to-crack-down-on-violations
Previous episodes:
Season 10, Episode 5: How Mekong region organized crime built a global cryptocurrency money laundering network: https://podcasts.apple.com/gb/podcast/season-10-episode-5-how-mekong-region-organized-crime/id1548510826?i=1000646371712
Season 9, Episode 8: Hamas, terrorist financing and the U.S. response to the 7 October attack: https://podcasts.apple.com/gb/podcast/season-9-episode-8-hamas-terrorist-financing-and-the-u/id1548510826?i=1000635015943
Series 9, Episode 3: North Korea, Russia, crypto and changing attitudes to sanctions in Asia: https://podcasts.apple.com/gb/podcast/series-9-episode-3-north-korea-russia-crypto-and/id1548510826?i=1000631061413
Contact us:
Rachel.wolcott@thomsonreuters.com
More information about Thomson Reuters Regulatory Intelligence: https://legal.thomsonreuters.com/en/products/regulatory-intelligence
Compliance Clarified is a podcast from Thomson Reuters Regulatory Intelligence.
Listen to wide-ranging, insightful discussions on all things compliance for financial services firms. We delve into the hot topics of the day, the challenges faced and offer up practical ideas for emerging good practice. We de-mystify regulation and explore the art, as well as the science, of the ever-expanding role of the compliance officer. Enforcements, digital transformation, regulatory change, governance, culture, conduct risk – anything and everything impacting the compliance function is up for discussion.
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