COMPLYING WITH

SANCTIONS, SDNs & TRADE

EMBARGOES

Wednesday, October 9th

, 2013

1:00pm – 2:00pm

BORIS POPULOH

Sr. Vice President

Willis Relocation Risk Group

What Are Sanctions

Who Issues Sanctions

Sanctions Type & Scope

SDNs (Specially Designated National)

Who Must Comply with Sanctions

Sanction Territories

Sanction Violations

Sanction Penalties

Sanction “Touch-Points”

SANCTIONS: TODAY’S AGENDA

THE WILLIS GROUP

- Global Insurance Broker (NYSE:WSH)

- Founded in 1828

- London / New York HQ

- 21,000 Employees / 415 Offices / 130 Countries

- $3.48 Billion Revenue (2012)

- 65,000 + Global Commercial Clients

- 45% UK FTSE 100 / 40% Fortune 500

- Place $38 Billion of Clients Premium Annually

into Insurance Marketplace

- Only Global Broker with Mobility Practice Group

(Willis Relocation Risk Group)

196/0

TRADE SANCTIONS

ECONOMIC PENALTIES

TRADE RESTRICTIONS

ECONOMIC PROTECTIONISM ==

Sanctions are “domestic” measures and/or penalties

applied by one country on another with the purpose

of controlling, prohibiting or restricting financial or

trade activity of persons, entities and governments

in order to achieve policy objectives.

WHO ISSUES SANCTIONS?Any country can impose unilateral sanctions on any other territory.

They are referred to as DOMESTIC sanctions.

United Nations (UN) Resolutions can result in sanctions. If you

live in a UN member state you are likely to be subject to UN

Sanctions.

The European Union* (EU) also issues sanctions which are

enforced by each EU member state

* EU Member States: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland,

France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands,

Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom.

In the United States sanctions are issued by the Office of

Foreign Asset Control (OFAC)

SANCTIONS: Type & Scope

Financial Sanctions

can freeze the funds or any kind

of assets of a Specially

Designated National (‘SDN’)

can prohibit funds being made

available to an SDN

can restrict the availability of

insurance coverage & activity

(e.g. insurance prohibitions

relating to Syria, Iran, Cuba &

others)

Trade Sanctions

Syria and Iran have broad trade

sanctions against them, relating to

exports of crude oil and petrochemicals

from those countries.

OFAC: Specially Designated Nationals

http://www.ustreas.gov/offices/enforcement/ofac/sdn/index.shtml

Broad Sanctions

target entire countries or

industries

For example: the oil and

petroleum sanctions applicable

to Iran and Syria

Smart/Targeted Sanctions

target SDNs only

For example: asset freeze on the funds

of Korea Mining Corp (North Korea) or

Muhammad Gaddafi (son of Colonel

Gaddafi) - both are SDNs

SANCTIONS: Type & Scope

WHY IS THIS IMPORTANT TO ME?

US citizen (wherever you are working)

US permanent resident

Non-US citizen doing business in or from the US

(if you are on holiday picking up emails or making

calls from the US)

If you work for a US company or a subsidiary

owned by a US parent company

SANCTIONED TERRITORIES

Cuba

*

Cuba*

Iran

North Korea

Sudan

Syria

- Afghanistan - Egypt

- Rep. Guinea-Bissau

- Belarus - Eritrea

- Rep. of Guinea

- Burma (Myanmar) - Federal Rep. of Yugoslavia & Serbia -

Somalia

- Congo, Democratic Rep. of - Iraq

- Tunisia

- Ivory Coast (Cote d’Ivoire) - Lebanon

- Yemen

- Democratic Rep. of Congo - Liberia

- Zimbabwe

*

*

*

*

*

*

**

*

*

*

*

*

*

* *

*

*

*

SANCTIONED TERRITORIESOver time list will change as certain sanctions are lifted, or new countries

become subject to sanctions.

In addition, the scope of sanctions against these countries can change.

S

A

N

C

T

I

O

N

S

S

A

N

C

T

I

O

N

Ssanctions imposed

against Syria have

become significantly

broader in recent years

sanctions against Burma

have eased and mostly

been lifted

14

SANCTIONS: SDNsSpecially Designated Nationals list (the “SDN List”).

- members of certain current/former governmental regimes

- designated terrorists and terrorist groups

- organizations narcotics traffickers

- weapons proliferators

- persons involved in the black-market diamond trade

- a large number of vessels

LARGE LIST (5730 Entries)

60 Vessels Added

50 Amended Details

Increased Risk for Shippers

15

SANCTIONS: SDNs

It is a criminal offence for a US person to make funds directly or

indirectly available to individual, entities or groups listed in the

Specially Designated National List.

Larger number of SDN’s

ALBANIA, BANGLADESH, BOSNIA, CAMBODIA, COLUMBIA,

GHANA, KOSOVO, KUWAIT, MEXICO, PAKISTAN AND

PALESTINE

US persons are also prohibited from dealing with any entity which is 50% owned by an SDN .

SANCTIONS: ‘TOUCH-POINT’

A sanctions ‘touch-point’ can include (but is not limited to)

instances where the transferee, the intermediary, the

insured or the direct client is:

- a national of a sanctioned territory;

- the government of a sanctioned territory;

- a entity (incl. vessels) incorporated in a sanctioned territory;

- a entity owned or controlled by any of the above;

- conducting business in a sanctioned territory;

- shipping goods or flying to/from a sanctioned territory; or

- paying international transit damage claims

SANCTIONS: VIOLATIONS

Potential Offences:

Attempts by a US person, or persons within the US to evade sanctions

Attempts by a US person to make funds directly or indirectly available to

entities or individuals on the “SDN List”

US person investing in a company that is an SDN or that is owned or

controlled (50%) by an SDN

The facilitation and approval of transactions by third parties involving SDNs is

prohibited

It is a crime for any person (US or not) to conspire to cause a US person to

contravene OFAC in any way

Under certain sanction regimes a individual can be found guilty of a sanction

breach even if that individual did not know the transaction was prohibited

SANCTIONS: VIOLATIONPossible Responses to Apparent Violations

No ActionInitiate an InvestigationRequest further information from the potential violatorIssue a Cautionary LetterFind that a Violation Occurred (Non-Monetary)Issue a Civil Monetary PenaltySuspension of Operating LicenseIssuance of a Cease and Desist OrderRefer the case for Criminal Prosecution

SANCTIONS: PENALTIES

Requested Information MUST be Provided

$20,000.00 Penalty

$50,000.00 Penalty / Violations valued at more than $500KBroad Subpoena Power. “Every person is required to furnish under oath… at any time as may be required… complete information relative to any transaction…… or relative to any property in which any foreign country or any national thereof has any interest of any nature whatsoever, direct or indirect.”

Civil & Criminal Penalties

Criminal Penalties

- up to $1 million per violation

- up to 20 years in prison

Confiscation of company’s assets

Regulatory Enforcement Action

Severe Reputational Damage

IT IS IMPORTANT TO GET THIS RIGHT!

SANCTIONS: PENALTIES

SANCTIONS: PENALTIES

General Factors

1. Willful or Reckless Violation of Law

2. Awareness of Conduct at Issue

3. Harm of Sanctions Program

4. Individual Characteristics of Violator(s)

5. Remedial Response

6. Cooperation with Investigating Agency

Mitigating Factors

1. Voluntary Self-Disclosure

2. Effective export compliance program

3. Violation was isolated occurrence

4. License would have been issued

5. Cooperating with Agency

SANCTIONS: COMPLIANCE

START to FINISH

Risk Management Tool

- Formal Program

- Training/Awareness

- Recordkeeping/Audits

Competitive Advantage

- Increasingly Important to Clients/Customers

- Multinationals

- 3rd Parties

- Relocation Networks

SANCTIONS: PROTECT YOURSELF

My Country does not impose Sanctions on Territories Listed

I am not a US Person

IT DOESN’T MATTER!WHY?

Sanctions regimes are incredibly complex, and given the international

nature of the Int’l HHG Transportation and Relocation Industry as well

as the clients we serve, the act of transporting goods and related

processes can sometimes impact transactions in unexpected and

unforeseen ways.

THANK YOU

Boris Populoh

Willis Relocation Risk Group

boris.populoh@willis.com

www.willisrelorisk.com

COMPLYING WITH

SANCTIONS, SDNs & TRADE

EMBARGOES

Wednesday, October 9th

, 2013

1:00pm – 2:00pm