Calibrating the Crosshairs

This article outlines a practical six-step process financial institutions can follow to implement export control red flags within their compliance program. They are referenced as a key requirement in regulatory expectations of financial institutions, which continue to increase in response to recent geopolitical events.

Unverified and Unsure

The Commerce Department’s Bureau of Industry and Security maintains and administers several lists that involve goods, software, and technology, governed by the Export Administration Regulations. The Unverified List is just one of these. What is the Unverified List and what due diligence obligations do entities that transact with parties on the Unverified List have?

New BIS Export Compliance Guidance for Financial Institutions

The U.S. Bureau of Industry and Security recently published guidance for financial institutions on complying with strategic trade controls and discussing best practices, red flags, screening, and reporting. The latest guidance provides greater detail on due diligence and risk management to help financial institutions detect and deter emerging and evolving export controls evasion.

The Ghost in the Shell

Shell companies, meaning businesses that have a legal structure but no real operations or assets, have been used extensively in money laundering, proliferation finance, sanctions evasion, tax evasion, and other types of financial crimes. There is now evidence that shell companies are increasingly being used for strategic trade control violations too. This is good news for financial institutions: existing controls designed to detect the misuse of shell companies for other financial crimes will catch export control-related activity in their net too – but some adaptations are required.