Financial Crime World

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BOUVET ISLAND: A Focus on Compliance in Finance Amidst Global Trade Risks

As international trade continues to play a vital role in global commerce, it has also become a major conduit for inadvertently funding terrorist activities, providing capital and restricted goods to sanctioned parties, and laundering funds from drug traffickers and other criminals. In response, Dow Jones has developed data and technology tools to screen, monitor, and provide lookup capabilities across key areas of trade-related risk.

The Growing Importance of Compliance

Regulatory bodies are increasingly focusing on the maritime trade and shipping sectors, as well as banks that finance global trade and insurers that cover cargo shipments. This shift in attention has led trade finance and compliance teams to recognize that regulatory risk can be associated with various aspects of a trade transaction, including:

  • The goods being traded
  • Buyers and sellers (and their affiliates)
  • Cities and ports along the shipping route
  • The vessels themselves

Deceptive Shipping Practices: A Growing Concern

Recent shipping advisories from the Office of Foreign Assets Control (OFAC) have highlighted the need to identify deceptive shipping practices, which some countries may use to bypass sanctions restrictions. For example, in 2018, North Korean ports were involved in over 260 tanker deliveries of refined petroleum through such tactics, resulting in at least 50 vessels and 160 associated companies being investigated by global regulatory bodies.

To protect their firms from these risks, trade finance professionals must adopt a mix of automated screening and manual checks. This can involve:

  • Integrating XML feeds of dual-use goods phrases into existing workflows for transactional screening of trade finance instruments
  • Ensuring comprehensive sanctions list coverage spanning international and domestic-level requirements

Dow Jones International Trade Compliance Solutions

Dow Jones offers a range of tools to help firms navigate these complex regulatory requirements. Their RiskCenter platform provides online due diligence capabilities for identifying red flags among:

  • Goods
  • Counterparties
  • Locations
  • Vessels

The RiskCenter platform covers over 60,000 vessels (including 1,500 sanctioned vessels), 4,000 cities and ports in sanctioned countries and regions, and a proprietary list of dual-use goods match phrases. By leveraging these solutions, trade finance professionals can ensure that their firms remain compliant with evolving regulations and avoid potential risks associated with global trade transactions.