Sanctions are restrictions imposed on individuals, entities or countries; in an effort to curb their activities and apply pressure on them to change their unlawful pursuits. This is brought about when such individual or country is found to breach an international law or human right, or indulge in illegal activities like drugs and human trafficking. Sanctions are also used to target the activities of terror organisations and those involved in arms and nuclear proliferation. Sanctions can take various forms, but the most relevant types are economic restrictions, financial sanctions, trade sanctions, or asset freeze.
What are Financial Sanctions?
Financial sanctions are usually international lists compiled by the UN and the EU directives, circulated as Sanctions Lists. Businesses and financial institutions have an obligation to ensure compliance with financial sanctions, including ongoing monitoring of transactions. To ensure compliance with financial sanctions, it is necessary that businesses monitor both the international and national databases of Sanctions List and the UN Sanctions Committees list related to activities of terrorism and the proliferation of weapons of mass destruction.
The penalties for breach or non-compliance are contained in the statutory laws of each nation.
What are Sanctions Lists?
Sanctions Lists are lists of specifically designated nationals, designated persons or entities and include:
– “Specially Designated Nationals and Blocked Persons” maintained by the OFAC
– “Specially Designated Global Terrorist” maintained by the OFAC
– “Consolidated List of Financial Sanctions Targets and the Investment Ban List” maintained by Her Majesty’s Treasury
– “Targeted Sanctions” by the UN on certain groups or individuals, or political elites in a target country aimed at reducing any collateral damage to the financial system
– “Selective Sanctions” by the UN, to place restrictions on particular products or financial flows, such as ban diamond trading with a sanctioned country
– Or other similar list maintained by, or publicly declared as Sanctioned Designation by any of the Sanctions Authorities, like the EU.
The lists are amended, supplemented or substituted from time to time.
The Sanctions Lists provide information that help decide whether you are dealing with someone who is subject to sanctions, and lists:
– Full name
– Any known aliases
– Honorary, professional or religious titles
– Date of birth
– Place of birth
– Passport details
– National identification numbers, such as ID cards, Social Security Numbers.)
– All known addresses
– Any additional information considered useful, such as aliases, details of family, positions held)
– Title of the financial sanctions regime under which the designated person is listed
– The date when the designated person was added to the list
– Last updated information
– A unique ID reference number assigned to the designated person/entity