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Evolving Sanctions Landscape: Key Developments for Foreign Financial Institutions in 2024

As we enter a new year, foreign financial institutions must stay informed about the evolving sanctions landscape and regulatory developments that can impact their operations. This article highlights key points to consider in 2024.

Russia Sanctions Dashboard

  • As of December 15, 2023, over 12,000 individuals and entities have been sanctioned under the Russia sanctions program.
  • Foreign financial institutions should be aware of these listings and ensure compliance with applicable regulations.

Canada’s New Rule on Ownership/Control

  • Canada has amended its sanctions laws to allow the government to seize property owned or controlled by sanctioned parties, including those outside of Canada.
  • This change emphasizes the importance of thorough due diligence in identifying potential risks associated with sanctioned entities.

European Banking Authority (EBA) Public Consultation

  • The EBA is launching a public consultation on two sets of guidelines for financial institutions and payment service providers (PSPs) regarding sanctions compliance.
  • These guidelines are expected to provide clarity on regulatory expectations for financial institutions operating in the EU.

Sanctions in a World of Crypto and Instant Payments

  • The increasing use of cryptocurrencies and instant payments has raised concerns around sanctions evasion.
  • Regulatory bodies are likely to clarify their expectations for these entities, emphasizing the need for robust compliance programs.

Call to Action

To stay ahead of the evolving sanctions landscape, foreign financial institutions should:

  • Update risk assessments to reflect changing geopolitical developments
  • Proactively address potential risks and challenges associated with sanctioned entities
  • Consider innovative technologies to enhance sanctions compliance
  • Reevaluate team credentials to ensure they possess the necessary expertise
  • Ensure coordination across the organization to maintain a unified approach to sanctions compliance
  • Closely monitor regulatory developments to stay informed about changing expectations

Conclusion

The sanctions landscape is constantly evolving, and foreign financial institutions must be prepared to adapt. By staying informed about key developments and taking proactive steps to ensure compliance, these entities can minimize risks and maintain their reputation in a rapidly changing world.