Sanctions challenge for financial services

Australian financial institutions need to become more risk aware with respect to the enforcement of global sanctions, according to new research released this week by Deloitte.

The Deloitte study, Facing the Sanctions Challenge in Financial Services, claims that while financial services companies recognise that sanctions compliance is a matter of concern, only half have turned their sanctions policies into a process.

According to the lead partner of Deloitte’s Asia Pacific Sanctions Advisory Practice, Graham Dillon, this creates the real possibility of regulatory discipline by authorities.

“The absence of a robust sanctions compliance program, or an inadequate one, poses a real risk of prosecution from either Australian or international authorities, in particular the US Office of Foreign Assets Control,” he said.

Dillon warned that the increasing burden of regulatory oversight was occurring at a time when financial institutions were having to contend with shrinking compliance budgets and headcounts.

He described the scenario as “a combination fraught with danger”.