Sanctions Compliance Programs and Solutions

Part
01
of three
Part
01

Sanctions Compliance for Corporations

We have gathered 15 industry reports, publications, and viewpoints/whitepapers discussing sanctions compliance for corporations in the United States. These reports provide information on the implementation of anti-money laundering laws and regulations by various organizations within the United States' financial service industry.

REPORTS DISCUSSING SANCTIONS COMPLIANCE FOR CORPORATIONS IN THE UNITED STATES

1. New Requirements to Combat Money Laundering

  • Link to the report: Here
  • The policies which were recently enacted by the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury are aimed at combating money laundering. This position was attributed to the fact that some celebrities and politicians have been secretly transferring money across borders. Therefore, financial institutions like banks are expected to gather information about their customers to combat terrorist financing or other illegal activities.

2. USA: Anti Money Laundering 2019

  • Link to the report: Here
  • This report revolves around the Money laundering policies and discusses in particular, the Bank Secrecy Act which was passed in 1970. The law was later changed in 2001, following the introduction of the USA Patriot Act. Banks are supposed to obey the rules described therein to avoid being penalized.

3. Review of Anti-Money Laundering and Sanctions Policy and Enforcement

  • Link to the report: Here
  • This article details the ongoing discussion between the United States Department of the Treasury's Office of Foreign Assets Control and FinCEN, on matters concerning to money laundering. The two groups suggest that they will continue their discussions with other organizations, such as financial institutions to curb the vice. The article also states that banks should comply with the Bank Secrecy Act to avoid penalties.

4. Economic Sanctions and Anti-Money Laundering Developments: 2018 Year in Review

  • Link to the report: Here
  • The Treasury’s Financial Crimes Enforcement Network (FinCEN), the Securities and Exchange Commission (SEC), and the New York Department of Financial Services (DFS) collect information on financial institutions (such as banks) to combat international money laundering. The report also covers information on why the United States Department of the Treasury's Office of Foreign Assets Control (OFAC) demands that financial institutions should conduct frequent risk assessments or that they should be provided with the tailored training on OFAC sanctions to avoid being fined.

5. Anti-Money Laundering: An Overview for Congress

  • Link to the report: Here
  • Banks should keep their clients' information up-to-date to prevent money laundering. Other related aspects include record-keeping and compliance programs to prevent hackers from laundering their illicitly derived profits.

6. Anti-Money Laundering (AML) Policy

  • Link to the report: Here
  • This article describes the importance of the need for banks to comply with AML regulations. Know Your Customer (KYC) and Anti-Money Laundering (AML) policies are aimed at combating financial crimes. For example, financial institutions should not engage with the entities listed on the Office of Foreign Assets Control’s Specially Designated Nationals List (SDN).

7. Anti-Money Laundering and Fraud in the USA

  • Link to the report: Here
  • This article discusses the federal anti-money combating and laundering laws in the United States. Banks can be penalized for violating the Bank Secrecy Act, meaning that they should not conduct transactions in US dollars with criminals.

8. Anti-Money laundering

  • Link to the report: Here
  • Financial institutions can be fined for transferring money related to specified unlawful activities (SUA) under the Bank Secrecy Act (BSA). Therefore, they should report such cash transactions to the authorities.
  • URL: https://gettingthedealthrough.com/area/50/jurisdiction/23/anti-money-laundering-united-states/

9. Money Laundering: An Overview of 18 U. S. C 1956 and Related Federal Criminal Law

  • Link to the report: Here
  • Financial institutions can be fined for concealing the nature and source of their proceeds, which they obtain.

10. Anti-Money Laundering (AML) Source Tool for Broker-Dealers

  • Link to the report: Here
  • Financial institutions shall be held liable in the event of failing to file the reports of their financial transactions to prosecute people indulging in money laundering activities.

11. U.S. Anti-Money Laundering Statute and Case Law

  • Link to the report: Here
  • Financial institutions should file the currency transaction report (CTR) in case their transactions exceed $10,000 to avoid being penalized.

12. OFAC's Revised Reporting Rules Create New Compliance Requirements for All U.S. Persons

  • Link to the report: Here
  • Banks should abide by the new rules, which were enacted by OFAC in regard to the annual blocked property reports and unblocked property reports to avoid fines.

13. Big US Banks to Push for Easing of Money Laundering Rules

  • Link to the report: Here
  • Financial institutions must file everything which they suspect can result in litigation on their side.

14. Anti-Money Laundering Regulation: A Primer

  • Link to the report: Here
  • Banks must file SAR with their Financial Crimes Enforcement Network (FinCEN) if they suspect cases of money laundering, if not they will be penalized. SAR stands for self-report via a Suspicious Activity Report.

15. Taking stock of 2018's money laundering scandals: When is enough enough?

  • Link to the report: Here
  • In 2018, US Bancorp and Rabobank were penalized because of not having the proper money-laundering controls.

Part
02
of three
Part
02

Technical Solutions for Sanctions Compliance

We have found 12 articles, reports, and white papers discussing the technical solutions for sanctions compliance management in the US. These works not only discuss the emerging trends and scopes of these solutions, but they also provide a contrast to legacy solutions by iterating the drawbacks of such legacy sanctions compliance solutions.

REPORTS, PUBLICATIONS, AND VIEWPOINTS/WHITEPAPERS DISCUSSING TECHNICAL SOLUTIONS FOR SANCTIONS COMPLIANCE IN THE US

1. AI and ML in Financial Services Compliance Management: Use Cases for FIs

  • Provides case studies and deep insights into the application of Artificial Intelligence and Machine Learning into Compliance Management, including sanctions compliance.

2. Artificial Intelligence in Regulatory Technology (RegTech) — 5 Current Applications

3. 6 Ways to Reduce False Positives in Sanction Screening

  • Provides technical methods to avoid false positives occurring while using a legacy sanction compliance tool.

4. Sanction Screening: The True Cost of Legacy Sanction Screening Systems

5. ROUNDTABLE: Sanctions Compliance & Enforcement

  • A word-by-word transcription of a roundtable organized in March 2019 on the issue of emerging trends in Sanctions Compliance using technology and otherwise.

6. Sanctions Compliance in Cryptocurrency: Five Keys to Preparing your Business with Blockchain Analytics

  • A white paper on how to properly secure a company against cryptocurrency-related sanction risks.

7. Sanctions Compliance: Creating a Centralized System

  • A white paper examining the need to create a centralized compliance system: the challenges businesses face, possible technology solutions, and recommendations for next steps.

8. The Lawyers Using AI to Keep Tabs on New Global Sanctions

  • Provides a report on how lawyers in the US are using AI to keep track of ongoing and upcoming sanctions and their compliance by their clients.

9. How AI Can Improve Compliance with International Sanctions—And Increase Profit Margins...

10. The Emergence of AI RegTech Solutions for AML and Sanctions Compliance

  • A white paper discussing the rising use of AI technology in Regulatory Technology space, with a special focus on AML and sanctions compliance.

11. Facing the Sanctions Challenge in Financial Services: A Global Sanctions Compliance Study

  • Provides an in-depth, research-backed study on how the Global Sanctions Compliance space is transforming, also discussing the role of technology in improving compliance management.

12. Sanctions Screening Systems

Part
03
of three
Part
03

RegTech Compliance Tools

The RegTech industry shows a variety of sanctions compliance tools on the market right now. On the RegTech market, sanctions compliance tools like 8of9, Ayasdi, IBM RegTech, SmartReg, Digital Reasoning, Jumio, TransparINT, Trunomi, Aravo, and MJ Freeway provide a diverse array of regulation solutions for companies in many industries. Additional companies and products found that contribute to RegTech were compiled in rows 9-18 of the attached spreadsheet.

REGTECH COMPLIANCE TOOLS

RegTech is an ever-evolving industry with a multitude of uses across industries, but particularly in relation to financial institutions because of the need for tighter regulations for customers and employees, although other industries greatly benefit from these companies.
  • 8of9 transfers machine-produced data to employees in a more compact, sustainable, and comprehensive way, mostly in the financial industry.
  • Ayasdi incorporates AI and big data to measure risk and ML across a couple of industries.
  • IBM RegTech provides risk assessments for financial companies ranging from fraud to identity theft.
  • Hexanika is a company specializing in RegTech and is developing a product called SmartReg to provide compliance and risk insights.
  • Digital Reasoning uses AI to consider customer data.
  • Jumio develops facial recognition software to help companies prevent identity theft and fraud.
  • TransparINT provides information, depending on the industry, about risk assessments and develops web apps to track company regulations.
  • Trunomi has two main products on the market for companies to gain insights into their customers and business developments.
  • Aravo helps clients develop third-party risk management solutions.
  • MJ Freeway develops regulation solutions of all kinds specifically for people in the cannabis industry.

Sources
Sources

From Part 01
Quotes
  • "Now we tell banks to file a (report) on everything that might be criminal,” said Gary Shiffman, CEO of compliance software maker Giant Oak. "
From Part 03
Quotes
  • "With more than 150 years of hard work and commitment to making a real difference, our organization has grown in scale and diversity—approximately 286,000 people in 150 countries and territories, providing these services—yet our shared culture remains the same. Our organization serves four out of five Fortune Global 500® companies."
  • "RegTech, the “new Fintech” as we have called it, promises to disrupt the regulatory landscape by providing technologically advanced solutions to the ever increasing demands of compliance within the financial industry."
Quotes
  • "87% of respondents are evaluating or already using AI or cognitive for AML according to Risk.net’s 2019 survey."
  • "IBM Watson Financial Services uses a unique combination of technology, regulatory and domain knowledge to help firms manage new and changing risks and requirements."
Quotes
  • "Our relationships include folks who negotiate directly with regulators, write regulations, and interpret regulations, ranging from the legal side to accounting to the practical business application."
  • "With over 3,200 connections in 223 locations representing 39 countries around the world, we can answer mind-boggling questions in a matter of minutes."
Quotes
  • "At the heart of Symphony AyasdiAI’s Model Accelerator is a powerful approach to regulatory risk modeling that encompasses both unsupervised learning capabilities as well as supervised learning capabilities. By leveraging the learners, AMA is able to identify groups of variables and explain why they were selected – accelerating the creation of complex but explainable risk models."
Quotes
  • "We are here to make Big Data work for your enterprise by providing simplified, scalable products and services to tackle rapid change, regulatory pressures and increasing global competition. "
  • "Our unique solutions DRaaS (Data Readiness as a Service) and RaaS (Reporting as a Solution) are focused on providing the complete solution to your regulations and compliance issues. Using new technologies such as scalable computing (Cloud) and distributed parallel processing (Big Data) on End-to-End platforms, our smart solutions help simplify and prepare your organization’s data readiness."
Quotes
  • "The Customer Insights Platform uses patented AI Solutions to turn all forms of communications data into discoverable, understandable, and actionable insights. "
  • "Turn the voice of the customer into an actionable asset, informing CRM, CX, and management dashboards."
Quotes
  • "We handle large volumes of data and use human review to tag this data for faster artificial intelligence adoption."
  • "Jumio treats data privacy compliance as a mandatory requirement of any solution released to the market. This includes being fully GDPR compliant and operating and conforming to strict PCI-DSS data privacy requirements. This impacts how we develop our AI algorithms and ensure our business customers and their downstream users’ privacy is always respected."
Quotes
  • "TransparINT was created by financial crime compliance professionals with decades of hands-on experience. The platform evolved out of necessity, and in real world conditions. TransparINT is committed to providing solutions that protect your organization from unwanted risk."
Quotes
  • "Our patented technology is infinitely scalable and built to the highest security standards. That’s why Trunomi has passed IPSEC and Pentesting to banking standards. "
  • "Our write-only ledger stores each TruCert™ allowing you to prove that your business is compliant with global Data Privacy Regulation. Trunomi works around your business’s existing processes to capture and store Customer Consent and Permissions with cryptographic technology - all in real time."
Quotes
  • "136,000 corporate users benefit from our usability, agility, and scalability."
  • "With Aravo you can maintain a single inventory of all your third-party relationships and automate risk assessments, scoring, due diligence, continuous monitoring, issue management, and corrective action processes."
Quotes
  • "MJ Platform is more than cannabis compliance tracking, more than seed-to-sale software, and more than dispensary POS. MJ Platform is a true enterprise solution for managing your entire operation whether you are a boutique shop, a large multi-state or even multi-country business."
  • "We were the first cannabis-specific software company to enter the market, and we did so believing that when properly regulated and tracked, the opening of cannabis to free trade is good for the economy and the right thing for people who need medical access to cannabis."
  • "$13,000,000,000 sales tracked."