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Sanctions Screening Methods in Heard Island and McDonald Islands: A Guide for Businesses
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The importance of having a robust compliance program cannot be overstressed. Two recent incidents highlight the need for businesses to prioritize sanctions screening methods. Global Logistics Inc., an Australian freight forwarding company, was fined $6 million by the Office of Foreign Assets Control (OFAC) due to lapses in their sanctions screening processes. Similarly, Oceanic Trade Ltd., a Hong Kong-based offshore trading and cross-border trade financing company, was fined $5 million for breaching the Iranian Transactions and Sanctions Regulations.
The Importance of Robust Compliance Measures
- A robust compliance program enables foreign businesses using the U.S. financial system to meet their U.S. sanctions compliance obligations.
- Companies must prioritize risk-based sanctions screening controls to prevent OFAC sanctions.
- A comprehensive compliance due diligence program, auditing, and testing are crucial for overseas branches and subsidiaries.
Global Logistics Inc.: The Consequences of Rapid Expansion
Global Logistics Inc. provided international shipment services to and from the Democratic People’s Republic of Korea (DPRK), Iran, Syria, and other entities on the OFAC Specially Designated Nationals (SDN) and Blocked Persons list. Their rapid expansion was not supported by adequate compliance controls and policies on global trade.
The Extent of OFAC’s Penalties
- Global Logistics Inc. was fined $6 million for violating OFAC compliance regulations.
- The company took remedial action by beefing up their sanctions screening process and voluntarily self-disclosing the violations to OFAC.
Lessons Learned from the Incident
This case emphasizes the importance of:
- Risk-based sanctions screening controls in preventing OFAC sanctions
- A robust compliance due diligence program, auditing, and testing for overseas branches and subsidiaries
Oceanic Trade Ltd.: The Dangers of Rogue Employees
Oceanic Trade Ltd., a Hong Kong-based offshore trading and cross-border trade financing company, was fined $5 million by OFAC for breaching the Iranian Transactions and Sanctions Regulations. Their employees intentionally omitted any references to Iran in the documentation.
The Extent of OFAC’s Penalties
- Oceanic Trade Ltd. took rigorous remedial action immediately, identifying the infarctions by beefing up their sanctions screening process and voluntarily self-disclosing the violations to OFAC.
- The company terminated the offending employees and mandated denied party screening for all parties in all business transactions going forward.
Lessons Learned from the Incident
This case highlights:
- Why risk-based sanctions screening controls are necessary for preventing OFAC sanctions
- How employees attempting to circumvent organizational policies can hurt the company as a whole
Descartes: A Solution for Non-U.S. Organizations with OFAC Compliance
Descartes is a provider of an industry-leading suite of denied party screening, third-party risk management solutions, and trade content for leading business systems. Our solutions are flexible and modular, allowing organizations to pick the specific functionality and content they need for their particular compliance needs.
Benefits of Using Descartes Solutions
- Strengthen your compliance processes, including OFAC compliance
- Enhance your competitive edge
- Increase sales velocity