Financial Crime World

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MACAO’S SANCTIONS SCREENING CHALLENGES: UNDERSTANDING THE RULES AND RISKS

In the wake of recent sanctions-related regulations and enforcement actions, businesses in MACAO are facing increasing pressure to ensure compliance with international sanctions. Sanctions imposed on entities and individuals can have a significant impact on supply chains, vendor management, customer relationships, and operations throughout the global business community.

MEETING EVOLVING REGULATORY REPORTING REQUIREMENTS

The European Council has introduced Article 5r of Council Regulation 833, requiring EU credit and financial institutions to report semi-annually on outgoing transfers exceeding €100,000 from entities that are more than 40% owned by Russian companies, nationals, or residents. Moody’s has identified over 46,000 entities with a qualifying Russian nexus to help credit and financial institutions meet evolving regulations.

Four Types of Sanction Risk

Businesses in MACAO need to be aware of four types of sanction risk:

1. Sanctions Lists

  • Ensure coverage of all major sanction and watchlists around the world
  • Receive updates every 24 hours
  • Keep your sanctions lists up-to-date to avoid potential risks

2. Ownership or Control

  • Analyze ownership, control, voting power, and linkages to stay compliant with laws like OFAC’s 50% and the EU’s “by control” rules
  • Be aware of indirect relationships that could trigger sanctions risk

3. Changing Sanctions

  • Governments can place new sanctions and restrictions quickly
  • Make sure you’re ready to respond and ensure you always know your customer and supply chain risk
  • Stay informed about changes in sanctions regulations

4. Sanctioned Securities Screening

  • Detect complex networks of sanctioned entities and their issued securities
  • Identify potential risks associated with securities that may not be listed as sanctioned but are connected to a sanctioned entity

Detecting Complex Networks

Moody’s proprietary Orbis database has mapped data to issued securities, detecting:

  • Securities that might not have appeared on a sanctions list but were issued by a sanctioned entity
  • Securities issued by an indirectly sanctioned entity
  • This helps businesses identify potential risks and stay compliant with regulations

GETTING IN TOUCH

To learn more about how Moody’s can help you navigate MACAO’s sanctions screening challenges, request an exposure check or get in touch with our experts.