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Like many of you, the team here at Socure is deeply saddened and concerned with the recent geopolitical developments that have unfolded over the last week. In light of these events, the United States and other nations have applied economic sanctions as part of a strategy to influence the direction and outcomes of the ongoing conflict. With so much focus on sanctions, you may be wondering if your organization is doing its part and you may even be concerned about unknowingly enabling sanctioned individuals and entities. Ensuring sanctions compliance has never been more essential than it is now.

Who is Being Sanctioned?

As it stands, many key public figures and their direct associates are being sanctioned, but that is just the start. Think of a fishing net that is deployed on a boat. When launched, it covers a small area but then rapidly expands, capturing more and more surface area. The same is true of the current sanctions environment. The list is rapidly expanding outward from the top down to include any direct contacts, connections, and enablers of sanctioned individuals. As the list surface area grows, it will likely expand across many levels to be as thorough as possible.

While individuals are a key target of sanctions, they are not the only focus. Entities that are tied to sanctioned individuals are also in the crosshairs. Specifically, the Office of Foreign Assets Control’s (OFAC) “50% Rule” calls for any entity that has 50% or more beneficial ownership tied to sanctioned individuals or countries to be reported and blocked. While this is the normal definition of a sanctioned entity, in the current environment, sanctioned entities could be continuously added based on other criteria deemed necessary.

The Stakes Are High

Sanctions and watchlist screening has moved from a compliance activity that your organization needed to “check the box” from a regulatory perspective, to one that is of the most critical importance and urgency. As such, you should expect increased scrutiny from regulators moving forward. Protecting your charter, your organization’s reputation, and playing a supporting role in resolving the current situation are on the line.

How to Ensure Compliance

  • Perform an initial risk assessment for your organization
    The good news is if you have a watchlist program in place, all sanctions are administered through OFAC. But you can’t assume everything is covered if you are already screening. With the ever-evolving landscape, your organization’s first step should be to immediately perform a current risk assessment to understand whether there are any risks to your organization from the recently expanded sanctions that have been established.
  • Encourage organizational awareness and obtain support for rapid response efforts
    As the nature and scope of the sanctions continue to evolve, it is vital that teams have appropriately briefed key executives on the evolving landscape. Both speed and precision will be necessary to ensure compliance over the long run.
  • Ensure customer onboarding is protected
    Be certain your onboarding compliance screening is correctly configured to prevent sanctioned individuals and entities from initially establishing a relationship and transacting with your organization, especially as these individuals potentially seek out new channels to transact.
  • Deploy a continuous sanctions monitoring strategy
    The current sanctions environment is highly fluid and dynamic. While you may have been able to perform periodic rescreens against your customer list in the past to ensure compliance, that strategy is no longer sufficient in an era of daily, if not hourly, updates to OFAC. It is recommended that your organization rescreen against sanction lists at least daily. But even daily updates still leave some risk of exposure. The best protection for your organization is continuous monitoring so you are alerted in real-time to any risks requiring your attention.

How Socure Can Help

The current compliance and sanctions environment is unlike any before and calls for robust tools that can protect your organization in times like these. Socure’s Global Watchlist with Monitoring leverages sophisticated matching algorithms, proprietary data, and true continuous monitoring to deliver industry-leading accuracy and uninterrupted compliance with Know Your Customer/Customer Identification Procedures (KYC/CIP) regulations. Global Watchlist provides three service levels to customize your coverage for OFAC, Specially Designated Nationals (SDN), the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCen), 1100+ global sanctions and enforcement lists, 10k+ politically exposed persons (PEP), 10M+ adverse media, and more.

Of particular importance in the current geopolitical climate is deploying continuous, real-time monitoring of your customer list against current sanctions. Rather than rely on batch processes that can be time consuming and leave exposure to risk, Global Watchlist with Monitoring can enable real-time alerting so you are immediately alerted to risk and always remain compliant.

To learn more about how to protect your organization from emerging risks, and to do your part to enforce sanctions issued by regulatory authorities, please register for and attend our webinar New Sanctions, New Risks: How To Ensure Compliance on Tuesday, March 8, 2022 at 2pm ET. Click Here to Register.

Matt Johnson
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Matt Johnson

Matt Johnson

Matt is the Director of Product Marketing for KYC and Global Watchlist solutions at Socure. Prior to Socure, Matt established and led the product marketing efforts for fraud and identity solutions at TransUnion.