Pub. 8 2018-2019 Issue 4

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S January • February 2019 13 whose assets are blocked and with whom U.S. persons are prohibited from engaging in activities or transactions. What this signifies is an enormous update, all at once, to OFAC’s SDN list. By now, all U.S. financial institutions and organizations should have—or must immediately—perform a customer database re-screen to ensure they’re not conducting business with re-instated SDNs. For organizations that do not employ automated watch list screening, this task can seem practically insurmountable from a cost and time standpoint. What Should Institutions Do Now? Conducting sanctioned transactions or certain activities with SDNs canmean business-crushing fines by OFAC. In fact, the number of million-dollar civil money penalties has grown exponentially over the last few years. U.S. financial institu - tions—and all other organizations, for that matter—should: • If not already doing so, strongly consider implementing automated watch list screening. Trying to manually handle such an enormous update workload can easily overwhelm compliance staff and leave too much room for human error. • If there’s no doubt your institution has recently conduct- ed transactions with Iranian companies or individuals, ensure you cease any further transactions and re-screen your customer database. • Review policies and procedures, particularly those that might have allowed the types of transactions in question. • For non-U.S. subsidiaries of U.S. institutions, terminate any transactions with Iran. • Maintain an overall awareness that these actions by the Trump administration might just be the tipping off point for further events that may greatly affect the country as a whole—well beyond financial transactions. Secondary Sanctions Currently, the U.S. is the only country to withdraw from the Iran Deal, a fact that potentially complicates our relations with the remaining countries involved in the JCPOA, due to what’s called secondary sanctions. Secondary sanctions come into play for cases in which the U.S., another country, and Iran were involved in business dealings prior to our withdrawal from the deal—and the other country continues those dealings with Iran. For example, if the U.S. conducted transactions with France and Iran involving goods and services used in the Iranian au- tomotive industry—and France continues those transactions that the U.S. has now sanctioned—France could be subject to secondary sanctions. These sanctions can lead to commercial and legal risks. What’s Next? That’s the million-dollar question. Unfortunately, the answer is “wait and see.” However, if this presidential admin - istration continues on its current course, Iran sanctions could OVER YEARS OF IMPACT Call us today at 303.860.0242 or refer a small business anytime at coloradoenterprisefund.org Financing startups and existing businesses up to $500K plus SBA loans up to $250K Dragonfly Apparel l Denver be just the beginning. In fact, relations with a huge petroleum supplier, Saudi Arabia, appear less than solid following the death of journalist Jamal Khashoggi. For now, it’s vital that financial institutions and all other American businesses remain solidly aware of how this action plays out. And of course, screen and re-screen all customers. For much more on this topic, listen to the Iran Sanctions epi- sode of CSI’s podcast, Fintech Focus. n Amber Goodrich, compliance strategist for CSI Regulatory Compliance, has more than 10 years of financial industry experience. She is a Certified Regulatory Com - pliance Manager (CRCM) and Certified Bank Secrecy Act (BSA) Professional (CBAP). By now, all U.S. financial institutions and organizations should have—or must immediately—perform a customer database re-screen to ensure they’re not conducting business with re-instated SDNs.