Mr. Watchlist’s DesigNation

Just reviewing the pair of settlements OFAC made with Deutsche Bank last week - and pulling out the lessons for our own compliance operations.

I know, I know - 2 episodes in 2 days... don’t get used to it. It is Labor Day weekend, after all...

Last week, the US Commerce, State and Treasury Departments issued a joint advisory about North Korean ballistic missile procurement activities, and the compliance implications. What were the big, if perhaps subtle, takeaways from the advisory - and who really was it aimed at (hint: it wasn’t US firms, by and large).

Effective sanctions require both coercive measures, and diplomatic overtures. Recent pronouncements out of the U.S. State Department seem to indicate that they’ve only half-learned that lesson.

It’s not the sinner I’m concerned with here... it’s the sin of forgetting the need for a negotiated exit strategy from international conflict.

Let’s discuss.

Today’s topic: the US multiagency advisory on North Korea’s procurement activities for its ballistic missile program - and the message that the US government is trying to send with this document.

I thought that, while not that much of note is happening on the world stage (Helloooo, US Presidential Election!), I’d review some of the foundational documents that OFAC has produced over the years. And where better to begin than last year’s Framework document? Today, we’re talking about Management Commitment, the first of OFAC’s five “essential components” of a sanctions compliance program.

The US just imposed export licensing restrictions, and visa restrictions, on parties associated with construction of militarized artificial islands in the South China Sea - instead of using OFAC’s sanctions powers. Is that a good thing, a bad thing, or...? Let’s discuss/

Today’s episode is about Politically Exposed Persons (PEPs), and how they are different in the US as compared to international standards. And this episode was driven by last Friday’s joint statement on Due Diligence for PEPs under the Bank Secrecy Act (BSA) by FinCEN, OCC, FDIC, NCUA and the Board of Governors of the Federal Reserve.

Oh, and I have opinions ... kind of “a pox on both their houses”, kind of.

Today I’m talking about Curtiss-Wright Corporation’s reporting of potential OFAC violations, based on an article in the Wall Street Journal. I’m not so sure it’s so serious, based on the actions on the contracts administrator they fired.

BTW, I work for the company that owns the Journal - so... my opinions are not necessarily those of the WSJ or its parent company. Just saying.

Mr. Watchlist is really excited - FinCEN issued enforcement guidelines! Yeah, really... mind you, less than 3 full pages, but it’s a darn fine start. Talking about this today - and how it is similar (and different) compared to OFAC’s Enforcement Guidelines.

Stay safe, stay healthy

A foolish consistency is the hobgoblin of little minds... so saith Ralph Waldo Emerson. Why are sanctions so lacking in nuance? Why do regulators keep imposing asset freezes on parties with no assets and those who don’t conduct any international business? Having a “one size fits all” approach surely does not aid in sanctions’ effectiveness, and surely imposes a cost in efficiency for all who conduct sanctions compliance screening. Today, I’ll discuss a model which I suspect would both be more effective and more efficient.... the veritable sweet spot for things that both companies and governments strive for.