OFAC defines guidelines in robust sanction handling programs

US Treasury Department’s Office of Foreign Assets Control (OFAC) , published a set of guidelines to be follow in order to hold a robust sanction handling program as part of a sound compliance program.

Such guidelines include 6 key points to implement for achieving compliance:

  1. Senior Management Commitment.- Senior Management can be a challenging concept, but experience tell us that such function are most likely to be executive management the board of directors and leadership. The aforementioned officials are expected to set the tone at the top and to promote a “compliance culture”, including giving the necessary authority to respective controlling functions, budget and tools to facilitate risk oversight and mitigation of risk.
  2. Risk Assessment.– Entities are to identify their risk by defining threats and vulnerabilities existing in an organisation and then organising relevant mitigation actions. Those actions include knowledge about their potential exposition to sanctions via geographical footprint, customer base, product types and distribution networks.
  3. Internal controls.– For n organisation to hold a sound Sanctions handling program, controlling functions must be granted the necessary powers to execute their activities and robust frameworks are to be established and enforced in all activities of the organisation.
  4. Testing and Auditing.– Once a program is established, follow up, testing and ongoing review are key. To ensure a proper feedback, independent and comprehensive testing and auditing of the are fundamental  to produce retro alimentation and to be able to update the program based on the different input from controlling functions, auditors and regulators, while stress testing scenarios to ensure that the program is comprehensive in scope and effective in practice.
  5. Awareness and Training.– Any effective sanctions program, requires to maintain a robust awareness program in order to make relevant information available to staff as fast as possible;
  6. The same robustness is achieved by including relevant and targeted training in order to create, materialise and maintain a strong compliance culture and to facilitate the understanding of the scope, impact and role of sanctions.
    Human Capital.– for a robust sanction program to be effective, institutions must ensure that relevant knowledge exist in the organisation and that and the material expertise in internal and external reporting is kept in-house to better analyse relevant sanctions in effective manner and to ensure lawful and holistic cooperation with relevant authorities.




Jaime Prieto

Mr. Jaime Prieto is a lawyer experienced in Financial Crime, Anti-Money Laundering and Counter Terrorism Financing having extensive professional experience in both public and private sectors. Mr. Prieto has been a Head of Compliance in the European Union, the Americas and the Caribbean for banks, trust companies, asset managers, Big Four audit and advisory firms, RegTechs, government agencies and other types of financial professionals. In addition to his experience, he has been legal and educational chair in several compliance and sectorial organisations and performed as a teacher and speaker for a number of organisations and in several local and international forums. Furthermore, Mr. Prieto is an experienced Money Laundering Reporting Officer anda Data Protection officer with additional experience in risk management.
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