On October 18, 2023, the ACAMS New York Chapter held an in-person event titled Current Events and Hot Topics in Sanctions, which was sponsored by Matrix-IFS and in conjunction with the Gabelli School of Business, The Center for Professional Accounting Practices at Fordham University. The event was moderated by Pawneet Abramowski (Board Member ACAMS NY Chapter) and included the following panelists: Omesh Bhatt (Managing Director, Advisory Services Matrix-IFS), Shabbir Husain (Director, Sanctions Systems and Analytics, Silicon Valley Bank), and Peter Piatetsky (Co-Founder and CEO Castellum AI).
The event began with an overall discussion of Sanctions state and current geopolitical events having a direct impact in relation to application of sanctions. Specifically last year’s Russia invasion of Ukraine, as well as the attack by Hamas in Gaza/Israel.
Panelists began the discussion focusing on the effectiveness of sanctions post Russia’s invasion of Ukraine. There was thoughtful dialog presenting the value of collective global approach in implementing sanctions and some opposing perspectives where the overall approach has not yielded the desired results towards Russia. There was agreement that for the first time in history globally most nations agreed to apply simultaneous restrictions, but everyone recognized that Russia is still operating commercially and economically with many non-western partners.
Discussion then turned to the current events and application of sanctions in the Israel and Hamas war. Key points that were highlighted were use of technology to identify the network who may not have been identified in the past. Hamas has been designated a terrorist organization and is on OFAC’s sanctions list for decades. Therefore, the question that was further delved into was around financial institutions ability to stop all activity or mitigate the risk of funds flow out.
Risk identification, understanding of customer populations and geographic vulnerability is key in managing the sanctions risk. Being prepared within a financial institution and knowing what systems to check, where to escalate and coordinate amongst departments is important during these times.
The discussion then focused on other factors such as use of crypto to evade sanctions, use of other jurisdictions to circumvent the intended targets of sanctions and other nations like Venezuela and North Korea playing a role.
Several audience questions focused on the role of countries and technology in mitigating or supporting sanctions. The panelists provided some stark data points and use cases to share that sanctions navigation is challenging due to large amounts of daily work and false positive hits. But in order to continue to prevent sanctions evasion by the actors on the sanctions list, this effort is needed in the industry.
Finally, in response to the question about 2024 and beyond, the panelists shared their thoughts on what compliance officers need to do to keep up with the changing sanctions. Collectively, there was theme, 1. To continue to manage the risk by use of technology; 2. Be prepared and aware of the changing landscape of sanctions; 3. Have a dialog internally within your organization and be vigilant.
In conclusion, the discussion highlighted that as sanctions evolve so will the desire of sanctions evaders to find new ways to bypass the restrictions. This will remain a moving target for everyone and being alert to apply tools, techniques and technology is the way to stay up to speed on it.