Sanctions compliance requires enhanced board focus

 

Financial institution directors confront growing risks

 

An escalation of geopolitical conflicts, most notably Russia’s attack on Ukraine, has led to numerous sanctions issued by the U.S., UK and European Union that demand the scrutiny of boards in their oversight role.

 

A recent Grant Thornton LLP survey of financial institution personnel and board members revealed that sanctions compliance functions at organizations across the world are struggling to keep up with the depth and breadth of the sanctions. Meanwhile, the survey showed that individual boards were battling two separate concerns.

 

Some boards aren’t receiving enough information from management on sanctions compliance processes and topics. Other boards are getting so much information from management on these issues that it’s difficult to keep them all in context.

 

Leading boards are making sure they get the right information, as well as appropriate training on sanctions and compliance issues. The Financial Crimes Enforcement Network has stated that boards should verify that:

  • Leadership is engaged.
  • Compliance is not compromised by revenue interests.
  • Leadership provides adequate human and technological resources.
  • The compliance program is effective and has been tested by an independent and experienced party.
  • Both leadership and staff understand how their compliance reports are used.

For more information on the state of sanctions compliance and board oversight in this area, see the Grant Thornton survey report, “Russia-related risks take hold: 2023 global sanctions compliance survey results.”

 

Contact:

 
Sven Stumbauer

Sven Stumbauer is a senior financial crimes compliance professional and leader of Grant Thornton LLP’s Anti-Money Laundering (AML) and Sanctions practice.

Miami, Florida

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