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All tagged compliance
A new report from the Majlis Research Center offers the first assessment of what “verified” sanctions relief might look like, providing a glimpse into how negotiators will take forward a key demand set out by Iran’s Supreme Leader.
◢ The Trump administration has imposed successive rounds of economic sanctions targeting nearly all productive sectors of Iran’s economy. But a new wave of restrictive measures now under consideration would have the practical effect of totally severing Iran’s economy from Europe, critically undermining humanitarian trade with Iran.
◢ Venmo is a “digital wallet” connected to one’s bank account that allows users to instantly send and receive money. Venmo users commonly include little messages when sending money to friends. But as a recent experience shows, including the words “Iranian” or “Persian” in a memo, even in reference to a pizza dinner among Iranian friends, can have transactions blocked for further review. Yet including the word “cocaine” in a payment memo will not lead to a compliance review, despite the violation of Venmo’s user agreement. This reflects the unique stigma around Iran transactions.
◢ In a recent speech, Under Secretary of the Treasury Sigal Mandelker warned that foreign companies that maintain a presence in Iran must conduct “extra due diligence to keep them from being caught in Iran’s deceptive web.” But background conversations with several compliance specialists reveal that US sanctions are a major barrier to key AML/CTF reforms in Iran. Industry-standard compliance software is not accessible for Iranian end users, leaving some experts to conclude that Iran is being “set up to fail.”
◢ On 8 May 2018, U.S. President Trump announced that the United States “will withdraw from the Iran nuclear deal” and that the United States “will be instituting the highest level of economic sanctions”. At the same time, U.S. authorities announced that U.S. sanctions would be re-instated, at the latest by 4 November 2018. What does this mean for companies who have ties to Iran or who do business in Iran?
◢ In the last week, European business leaders and policymakers have grown more vocal about the possibility that the European Union would employ blocking regulations to protect European businesses from the reach of US secondary sanctions on Iran.
◢ Despite limits to their legal effectiveness, blocking regulations can serve as part of the suite of political, legal, and commercial measures employed by European governments to protect their businesses in Iran.
◢ Iran's inability to link with the European banking system stems in part from a lack of capacity in key governance and compliance functions.
◢ In the 1990s, European governments launched substantial "training and technical assistance" programs to help post-Communist states raise standards. Iran needs similar programs, and a model from Sweden may be the most effective.
◢ Managing risk is a key part of an Iran market entry strategy.
◢ There are four major categories of risk to consider: commercial, legal, political, and reputational.
