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Recent deferred prosecution agreements (DPAs) and OFAC settlements focus on how businesses are applying the five elements to revise their sanction compliance training programs.

5 components in which these businesses committed to making significant improvements are :

  1. Management

    It must be ensured that current senior management supported considerable investment in upgrading sanction Compliance training programs in all management commitment organizations. This includes verifying if compliance staff has the resources, training, relevant background, and authority to design and implement robust procedures and policies. Lay down clear-cut instructions from the top management ensures that every person employed by the organization knows that he is responsible for preventing sanctions breaches. If an employee reports an issue, executives, including leadership and the board of directors, will take it seriously.

  2. Risk Evaluation

    OFAC encourages organizations to carry out risk assessments to adequately account for sanctions-related risks across products, supply chains, customers, counterparties, services, intermediaries, transactions, and geographies. Businesses need to update their risk evaluation to account for changes in business activities or deficiencies that are recognized by audits of their internal controls. Updating risk assessments on a regular basis assist in identifying blind emerging risks and spots.

  3. Internal Controls

    Strong compliance programs largely depend on their proper implementation. Internal controls assure that businesses have implemented compliance programs in a way that can detect, prevent, and respond to actual or suspected prohibited conduct. Back-end finance team members, as well as front-line employees, can effectively manage risks, including sanctions risks, only when policies are translated into day-to-day activities. The key is to establish well-designed manual and automated controls around key business processes like observing new business development, sales, vendor or third-party onboarding, and payments to ensure that business is not conducted with sanctioned persons or entities.

  4. Testing and Auditing

    Independents tests and auditing must be done before implementing a comprehensive sanctions program in order to confirm its continued effectiveness. The auditing and testing process includes an assessment of the control functionality, sufficiency of resources to manage potential exceptions, frequency, independence, and authority of those with responsibility for escalation and reporting to the audit committee, board, and executive leadership. Auditing and testing practices identify where the implementation gaps exist, the enterprise can respond to them quickly.

  5. Training

    A firm’s compliance staff requires regular and structured training to reinforce an understanding of the risks they are facing and the actions they are required to take under the relevant procedures and policies. This training component may also extend to other business relationships, including clients, suppliers, and business partners. Compliance staff needs to learn about changes in regulatory or legal frameworks governing sanctions, which can occur constantly. Training gives compliance staff an edge over the rapidly changing risk environments.


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