Regulatory Matters

Question 1

What are usually regarded as mandatory sanctions lists?

Answer 1

• Supranational lists- such as those including targets designated by the UNSCR.
• EU lists for firms in Europe
• US lists
• Host country’s list
• List of parent company’s country
• Lists of major jurisdictions where the org trades
• Lists of neighbouring countriesb

Question 2

What are supplementary lists?

Answer 2

• Negative news
• OFAC Advisory to the Maritime Petroleum Shipping Community
• Private databases
• Blacklists

Question 3

What is the Foreign Sanctions Evaders (FSE) list and what does it list?

Answer 3

The FSE list is published by OFAC, on those who have violated or conspired to violate US sanctions on Syria or Iran, pursuant to EO 13608. It also lists foreign persons whi have facilitated deceptive transactions for or on behalf of persons subject to US sanctions. Transactions by US persons or within the US involving FSEs are prohibited.

Question 4

Is the FSE list part of the SDN list?

Answer 4

The FSE list is not part of the SDN list, however individuals and companies on the FSE list may also appear on the SDN list.

Question 5

What are examples of warning lists?

Answer 5

• wanted lists from police depts, govs ans national and intl investigation authorities
• lists from international tribunals
• enforcement actions
• disqualified directors and debarred companies
• FATF’s list of high risk and monitored jurisdictions
• EU’s list of tax havens and high risk countries

Question 6

Which are the more relevant fields for MT103 messages?

Answer 6

• Field 20 (Unique Reference Number), together with a date, is a helpful way to locate Swift messages
• Field 23 (Value date and payment), can determine whether certain sanctions apply. If US dollars were used, US sanctions restructuons would apply.
• Field 50 (Sending party) and 59 (Recipient) contain a set of min info required by the EU regulation on wire transfers and FATF Recomm 16.
• Field 70, 72 (Payment Description) contains remittance info that is a free text field.

Question 7

What info should be included pursuant to the Travel Rule in a transmittal order

Answer 7

• Name of transmitter, acct no.
• Address of transmitter
• Amt of transmittal order
• Date of transmittal order
• Identity of recipient’s FI
• as many of the following items : name and address, acct number, any other specific identfiers of recipient
• name and address or numberical identifier of the transmitter’s financial institution.

Question 8

What does FATF Recommendation 16 specify?

Answer 8

Need for FIs to provide info abt the originator of a payment as well as the beneficiary.

Question 9

What is the US Denied Persons List?

Answer 9

Individuals and entities whose export privileges have been denied by the BIS. American companies and individuals are forbidden from entering into any export dealings with any person or entity on the DPL

Question 10

Why do MT700 messages, which are often used for letters of credit and trade finance transactions, carry an elevated sanctions risk?

Answer 10

These messages tend to include a significant amount of unstructured data, including descriptions of the trade finance deals. Because the data is unstructured, meanjng the data is not in a predefined format, MT700 messages can generate many false positive hits.

Question 11

What is recommended for screening of trade related activities?

Answer 11

ASTa should be used in conjunction with manual screening and additional due diligence on a risk sensitive basis.

Question 12

What is the Wassenaar Arrangement?

Answer 12

Dual use goods- sims are to promote transparency and increased responsibility in transfers of conventional arms and dual use goods and technologies.

Question 13

What are some red flags concerning dual use goods?

Answer 13

• the customer details are similar to those found on the US BIS List of Denied Persons
• Customer is reluctant to provide info about the end use of the goods
• the customer has little or no export or trade business background
• the customer is evasive or unclear abt the intended use of the goods or whether they will be re exported by the buyer
• the shipping route is abnormal for the product and destination
• packing is inconsistent with the stated method of shipment or destination
• delivery dates are vague, or deliveries are planned for unusual destinations
• the product’s final destination is a freight forwarding firm