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What do you do when the Bank has a transaction on behalf of a vessel that stopped in a sensitive/sanctioned port?

Andreea Tampu

Let it be clear from the beginning that I am not talking about trade finance.

The international shipping scenery is characterized by the presence of numerous intermediaries that offer different services to vessels that cross international waters and stop in international ports.

Andreea Tampu is a Certified Compliance Officer with a bank in Romania

What I learned from this project?

- In order to apply correct mitigations measures you must first know what you are dealing with. It is therefore clear why even the 1st FATF Recommendation is Risk Assessment (in this case we understood the specificity of this domain, the roles and activities of the intermediaries, what should and should not be rejected based on the sanctions regimes, what were the risks the bank was facing in order to be able to recommend workable, reasonable and covering mitigation measures);

- Specific training on sanctions is necessary for the bank staff dealing with such transactions (not only front-office personnel, but also from the international payment department);

- The Bank should increase awareness to such customers by formally informing them (through the bank website, through letters/notifications) about the sanctions regimes, how dealing with a sanctioned entity can impact them and the UN, EU and OFAC public databases they can access to verify their transactional parties;

- Sometimes, the obvious is right in front of us. You just need information and knowledge to be able to grab it. For example, it took me 2 individual analyses on shipping intermediaries to understand that the most valuable mitigation measure we had in many cases was the fact that those companies were providing services only to vessels that arrived in the Romanian ports. Considering that Romania is a EU and UN member state, it must also respect these sanctions regimes. Therefore, if the Romanian National Authorities allow a vessel to enter its territorial waters, this is in itself a good mitigation measure for the bank to start with.

The subject is too complex to contain all the sides of this problem and all the mitigations measures that could be adopted by the bank (including closing the business relation when the risk is greater than the risk appetite of the Bank). I advise those dealing with such situations to read the Guidelines mentioned above because they contain valuable information.

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