I recorded an interview on financial and trade sanctions issued by the US government and the results are here.
Sarabjeet Singh, a partner at @BMRAdvisors in India, and I discussed the impact of sanctions on the target countries and how financial institutions can effectively manage a sanctions programme, steering clear of breaches and simultaneously doing business.
The conversation was not merely off the cuff. In 2011, India faced difficulty when the Office of Foreign Asset Control increased its sanctions on Iran which ended the Asian Currency Union. For decades, India had been paying Iran for its oil supplies via the ACU payment system and its demise caused panic in both countries. India eventually found a way to pay the National Iranion Oil Company, via a branch of EIH Bank in the European Union in June. When the EU placed sanctions on dealings with Iranian banks, India looked to Turkey for a channel into Tehran. Now that route has also been blocked, the latest rumours suggest a Russian bank may lend its services to India.
Firms face a huge challenge in terms of sanctions compliance. When applying due diligence to clients and prospective new clients and deals, a compliance officer could continue to dig for information until a connection to a sanctioned entity appears. How far he goes in terms of due diligence is up to his own policy. We examine what banks can unearth in the due diligence phase and how to handle this data.
The attached power point slide goes into a little more detail on all the aspects discussed in the recording.
- You: US moves to restrict Iran financing oil exports through banks (guardian.co.uk)
- Senate Panel Approves Potentially Toughest Penalty Yet Against Iran’s Wallet – New York Times (nytimes.com)