Risks rise with increase in global sanctions
Sanctions punishing Russia for attacking Ukraine have created huge risk management challenges for financial institutions, according to Grant Thornton LLP’s global sanctions compliance survey.
What’s in the report?
- Regulators across the world have amped up their enforcement appetite and are increasingly focused on sanctions compliance.
- Sanctions compliance has become more costly and is expected to become more expensive.
- Financial institutions are meeting the challenge with agile, flexible risk assessment and management.
- It’s more important than ever to have an active, well informed board of directors to navigate sanctions.
Sanctions compliance risks multiply and intensify
Geopolitical conflicts, led by Russia’s attack on Ukraine, have created considerable new sanctions compliance risks for financial institutions across the globe.
The depth and breadth of Russia-related sanctions and the pace at which they are being rolled out make sanctions risk management a significant challenge.
Grant Thornton LLP’s global sanctions compliance survey reveals that:
- Regulators increasingly are focusing on sanctions compliance and have a significant enforcement appetite.
- The cost of sanctions compliance has been increasing and is expected to continue rising.
- The unprecedented number of sanctions imposed has created unique challenges for continuing with “business as usual.”
- A necessary focus on agile and flexible sanctions risk assessment and management is emerging.
- Despite global differences, financial institutions appear to face similar challenges with sanctions compliance, particularly managing their counterparty risk.
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Sven Stumbauer is a senior financial crimes compliance professional and leader of Grant Thornton LLP’s Anti-Money Laundering (AML) and Sanctions practice.
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