Is Your Sanctions Screening Enough?
from Corruption Crime & Compliance Hosted by Michael Volkov
Are you rubbing elbows with criminals? When OFAC designates someone a specially designated national, or SDN, it’s not a warning label. It’s a legal wall. Every asset that party has anywhere in U.S. jurisdiction, or in the hands of a U.S. person, is frozen. Every U.S. person is barred from transacting with them, directly or indirectly. The trap is OFAC’s 50% rule, which means any entity owned 50% or more in aggregate by blocked persons is automatically blocked too, even if it never appears on the published list. A clean name screen doesn’t mean a clean counterparty if you haven’t traced the ownership behind it. Enforcement is ratcheting up hard right now: Iran-related designations, cartel terrorism, Russia sanctions and evasion networks. The stakes are real - civil penalties in the tens of millions, frozen wires, correspondent banking risk, and secondary sanctions that can cut even non-U.S. companies off from the dollar system entirely. Sanctions screening can’t be a one-time check-the-box exercise. You need ongoing, ownership-aware screening that re-screens existing counterparties as the list evolves and actually traces beneficial ownership, not just the name on the contract. The Ethics and Compliance Q and A show is produced by One Stone Creative.
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