![]() This is a critical element to consider when examining potential technological partners and establishing risk management controls. Yael Regev, Sales Director at Windward emphasized that organizations need customizable controls that can be adapted based on their unique risk appetite and organizational structure. The most effective way to mitigate and manage risk is by having a balanced multimodal approach that uses human expertise to serve as the base and leverage technological capabilities. Automated controls, on the other hand, can be built into due-diligence processes and can be calibrated based on performance, risk appetite, and changes in regulations. Relying solely on manual controls will leave an opening for human error and cannot be built into processes. Bridging the gap between manual and automated controls This will enable optimization of technological solutions with human experts monitoring, influencing, or modifying the process when needed. These maritime compliance controls should be viewed as different layers of the risk management framework, ultimately reducing the likelihood of risk materializing.įinancial institutions need to combine manual and automated controls to manage risk and meet the new standard of expectations effectively. ![]() Almost half (49%) of the webinar participants said they have dedicated maritime controls in place. The maritime industry’s unique lifecycle requires specific maritime sanction controls to meet advisory requirements and mitigate risk. ![]() Fierman emphasized the significance of understanding contextual information about vessel behavior and the ability of technology to help determine risk level exposure and optimize internal processes. at Societe Generale, discussed the importance of developing the guidance, training, and policies internally to identify risks and mitigate their impact as best as possible. Because of the vast amount of information involved and the impossibility for human resources to manage it all, financial institutions must rely on technology to mitigate risk and abide by advisories.Īndrew Fierman, Head of Sanctions Americas at Barclays and former V.P. This requires institutions to have a combination of controls, or “consequence management,” to assess how they will react if a problem arises.īanks require in-depth due diligence and risk management solutions to evaluate the impact events will have on their risk exposure level and effectively manage them in real-time. To understand the risk a financial institution is exposed to, organizations must evaluate the entire customer lifecycle and onboarding process, including CDD cycle and screening processes, and build the proper controls and policies to assess the risk in any customer or transaction and how they will react if a problem arises must be taken into consideration. Managing sanctions from a banking perspective In layman’s terms, if one company has a comprehensive CDD policy and process, and the other only does simple list matching, they will not be judged in the same light. ![]() In the event that two companies are found violating sanctions in the exact same way, we can expect differing fines and punitive measures based on the comprehensiveness of their compliance programs. The advisories impact all aspects connected to maritime and place the responsibility and consequences in a broader net.Īccording to the advisory, organizations’ accountability for sanctions violations is measured by the preventive steps, policies, and processes implemented to mitigate them. Only 9% of participants were in the process of changing their approach.Īssociation of Certified Sanctions Specialist (ACSS) webinar moderator Natasha Bright reminded participants that everyone in the shipping ecosystem, no matter how remote, is “on the hook” when it comes to sanctions. The majority of participants, over 34%, did not think the sanctions were relevant to them. Foreign Service Officer asked participants how their company has changed their approach to maritime sanctions since the 2020 OFAC Advisory on deceptive shipping practices went into effect, and the result was surprising. The document detailed deceptive practices and sanction evasion tactics used by countries such as Iran, North Korea, and Syria and specified how deceptive shipping practices are commonly used, such as changing ship names and ownership structures.īethany Milton, Danske Bank’s Sanctions Compliance Officer, and former U.S. The OFAC advisory shook the maritime industry and signaled a shift in the U.S.’s approach to maritime risk. ![]()
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