Sanctions Compliance: Understanding the Role of Indirect Ownership and Control

To comply with sanctions rules, you must consider ownership and control of your customers and business partners – including indirect ownership and control, which can be difficult to determine.

Countries use sanctions as foreign policy tools. Sanctions can take a variety of forms, including travel bans, asset freezes, embargoes, capital restraints, and aid and trade restrictions. Doing business with a directly sanctioned entity poses risks, but entities can also be “indirectly” sanctioned, or sanctioned “by extension”, owing to their ownership or control. Identifying such entities can be complicated and time-consuming if you lack the proper systems and data.

A robust sanctions compliance program should include ownership and control requirements that consider:
» How indirect ownership and control affects supply chains
» Ownership percentages in the aggregate
» Director and ownership control

Moody’s Analytics provides data and tools that can help protect you from sanctions risks and contribute to a vigorous risk strategy.

Read the full article here.

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