Sanctions Reporting, Regulatory Risk

At a time during which the Trump Administration has dramatically increased its use of economic sanctions, OFAC has revised subject to comment its reporting, record-keeping, and licensing requirements, expanding these in numerous ways likely to increase regulatory risk not only for cross-border financial and payment companies operating in the United States, but for investment banks, foreign-exchange traders, trade-finance advisers, and all entities engaged in goods and-services transfers in areas or with persons targeted by U.S. sanctions. Given the scope of civil and criminal penalties associated with sanctions violations and related reputational risk, this sudden change in U.S. sanctions reporting and related requirements is likely to require prompt, senior-management, and board action at all companies engaged in cross-border finance and/or commerce. Indeed, even small-dollar, seemingly-routine retail transactions could be subject to reporting if sanctioned persons or entities make use of any institution seen as ill-prepared to file required reports.