The Gatekeepers: A Sanctions Course for Leaders in Dynamic Markets

How do we help a local business buy machinery from Germany? We need Euros. How do we help an exporter get paid by a buyer in the USA? We need US Dollars. Our bank can't print these currencies. We rely on relationships with huge international banks in New York, London, and Frankfurt. This is Correspondent Banking.

Think of it like this: our bank is a local shop, and to sell the world's most popular products (USD, EUR), we need a supplier. These global banks are our suppliers.

What happens if those global suppliers think our shop is 'risky'? What if they worry we're dealing with sanctioned individuals or helping criminals? They will cut us off. This is called 'de-risking,' and it's the biggest threat we face.

When it happens, the lifeline is severed. Suddenly, that business can't buy its machinery. The exporter can't get paid. Our entire economy suffers. Your job is to be the guardian of that lifeline. You prove to the world, every single day, that we are a safe, trustworthy partner.

Let's be honest about our reality. Our countries are often positioned between major world powers. One global power says, 'Don't deal with Country X,' while another says, 'Country X is our friend and a key trading partner.' It can feel like we are being squeezed.

This is where you become a skilled navigator, not a politician. Our job is not to agree or disagree with the politics of US, EU, or UN sanctions. Our job is to understand the map. Where are the rocks? Where are the storms? Your role is to steer our institution through these complex waters so that we don't crash.

In some companies, business teams see compliance as a 'cost centre' – a department that spends money and slows things down. We must change this perception, because it's wrong.

A single sanctions violation could lead to a multi-million dollar fine or get us cut off from US Dollars completely. What's the value of preventing that? It's immense. A strong compliance function is a competitive advantage. It tells the world we are serious and open for safe business. You don't cost the bank money; you protect its entire value and enable its future growth.

• The UN (United Nations): Think of the UN as the global referee. When they issue sanctions, every country on earth is supposed to follow them. They are usually for the most serious issues, like terrorism or nuclear proliferation.
• OFAC (US Office of Foreign Assets Control): This is the most powerful player. Why? Because they control the US Dollar. If a transaction, even between two non-US parties, is cleared in USD, it touches the US financial system. This gives OFAC jurisdiction. This is called extraterritoriality.
• EU & UK: These are major regional players with their own powerful currencies (the Euro and Pound). Their rules are critical for any business we do with Europe, and they often align with, but can differ from, US sanctions.
• Our National Lists: Never forget these! Enforcing our own country's rules is a matter of national security and sovereignty. We protect our own house first.

• List-Based: The simplest. There's a list of names (people, companies, ships). If you see a name on the list, it's a hard stop. The most famous is OFAC's SDN List (Specially Designated Nationals).
• Sectoral: This is more subtle. It's not a 'hard stop' but a 'detour.' For example, you might be allowed to do general business with a country, but you are forbidden from giving a long-term loan to its state-owned oil companies. You're targeting a specific *sector* of the economy.
• Comprehensive: This is a total lockdown. The entire country is a 'no-go' zone. Think North Korea or Iran. Almost no trade, no finance, nothing is allowed with these jurisdictions.

This is critical. Bad actors are smart. A sanctioned person won't use their own name. They will use a company they own.

The 50% Rule is our tool to catch this. It says: If one or more sanctioned persons own, in total, 50% or more of a company, that company is *also sanctioned by extension*, even if its name doesn't appear on any list.

Your job is to be a detective. When you see a company, you must always ask: 'Who *really* owns this?'

The rule is simple: we screen any party to a transaction or relationship that could be a name on a sanctions list. This includes:

• Customers: Both individuals and companies when you onboard them.
• Beneficial Owners & Directors: The people who own and control your customer.
• Payment Counterparties: The sender and receiver of any wire transfer.
• Trade Finance Data: This is crucial. You must also screen the name of the vessel, the shipping lines, and the ports of call involved in a trade deal.

Your system uses 'fuzzy logic,' which means it looks for names that are *close*, not just perfect matches. It will flag 'Mohammed' for 'Mohamad' or 'Smyth' for 'Smith.' Because of this, it will generate thousands of potential matches, or 'alerts.'

Don't be intimidated by this! A high number of alerts doesn't mean you have a high number of criminals; it means your safety net is working. The vast majority of these will be false positives (an alert on a person who is not the sanctioned individual, but just has a similar name).

Your goal is to efficiently sort alerts into two piles:

1. Obvious False Positives: The alert is for 'Apple Inc.' the tech company, but your customer is 'Apple Fruit Exporters Ltd.' Or the sanctioned person is 'John Smith' from the UK, but your customer is 'John Smith' from Nigeria with a different date of birth. You can clear these quickly (after documenting why!).
2. Needs Investigation: The name is a close match, and there isn't an obvious, immediate reason to dismiss it. This alert moves to the next stage of deep investigation, which we will cover in Module 4.

This triage process allows you to clear the 'noise' so you can focus your valuable time on what really matters.

An alert flags your customer, 'Mohamed Benali' in Tunis, against a 'Mohamed Benali' on a sanctions list. A name alone is not enough. You must gather more data points to prove or disprove the match.

Think like a detective comparing two photos. You need to compare:

• Date of Birth / Year of Incorporation
• Nationality / Country of Registration
• Address, City, or Country of Residence
• Passport Number or National ID

If the sanctioned person is a 55-year-old from Syria, and your customer is a 28-year-old from Tunisia, you can confidently conclude it is a False Positive. Your job is to document these differing data points as your evidence.

• Google Fu: Learn to use search engines like a pro. Search for a name in quotation marks ("Mohamed Benali") to get an exact match. Add other identifiers like `"Mohamed Benali" + "Syria"`. Use Google to find your local government's company registry and look up the company's directors.
• Vessel Tracking: For trade deals, use free websites like MarineTraffic or VesselFinder. Enter a ship's name and see its current location and past ports of call. Does the route make sense, or is it taking a strange, secretive path to a sanctioned port?
• News Media: Search reputable news sites (local and international). Has this person or company been mentioned in articles related to corruption or smuggling? This provides valuable context.

Sometimes, the documents look clean, but the *story* doesn't make sense. You need to develop a feeling for what's normal and what's not. Ask yourself: 'Does this make commercial sense?'

• Trade Red Flags: The goods description is incredibly vague, like 'used equipment' or 'general supplies.' Or the goods don't match the business (e.g., a small bakery is importing 'advanced navigation systems'). This could be a way to hide sanctioned or **dual-use goods** (items with both civilian and military uses).
• Payment Red Flags: The payment for a deal between your customer in Kenya and a supplier in India is coming from a shell company in a third country for no logical reason. This is a classic way to obscure the true source of funds.

It is NOT your job to make the final decision to block or reject a transaction alone. Doing so would put you and the bank at risk. Your role is to build the case file and escalate it to senior management.

The process is your safety net:

1. Analyst Investigates: You gather all the facts.
2. Analyst Escalates: You present a clear, well-documented case to your Manager or the Money Laundering Reporting Officer (MLRO).
3. Senior Management Decides: A senior person or committee makes the final call on what action to take.

This process protects you, ensures a senior-level review, and protects the bank from a rash decision.

Your documented file is the most important thing you will create. If a regulator or a correspondent bank asks six months from now why you cleared or blocked a transaction, your written report is your only defence. It is your shield.

• Bad documentation: "Checked, false match."
• Good documentation: "Alert on John Okoro reviewed. Matched against SDN list entry #123. SDN subject is 60 years old. Our customer is 25 years old with DOB 15/03/1998. Different identifying information. Concluded as False Positive. [Analyst Name, Date]."

When a true match is confirmed, there are generally two outcomes:

• Reject: This is more common. We refuse the transaction. We stop the payment from being processed, or we return the funds to the sender. The business is stopped cleanly.
• Block (or Freeze): This is more severe. For certain types of sanctions (especially OFAC SDN matches), we are forbidden from returning the funds. We must hold the money, freeze the account, and report it immediately to our national authorities and/or to OFAC. It is critical to know your bank's policy on which action to take for which type of match.

To be an expert, you must be curious. Spend 15 minutes every morning checking for updates. The best sources are free and reliable:

• Official Email Alerts: Sign up for the free email update lists from OFAC, the UK's OFSI, the EU, and the UN.
• Your National Regulator: Follow the guidance from your own country's central bank or financial intelligence unit.
• Reputable News: Read international business news to understand the geopolitical context behind sanctions changes.

This simple habit will set you apart and make you the go-to expert on your team.

The front-line business teams are your most important partners, not your adversaries. They are on the same team as you, with the same goal: safe, sustainable growth. Your role is to be their trusted advisor.

• Train Them: Help them understand the 'why' behind your requests. Teach them to spot basic red flags.
• Be a Navigator, Not a "No" Department: When you have to stop a deal, explain the risk in business terms – 'This deal puts our entire USD clearing relationship at risk.' Help them find safe ways to do business.