6 RECORD KEEPING AND DOCUMENTATION

6.1 There should be adequate documentation by the insurer for the basis of clearing or dismissing hits arising from its screening procedures (i.e. false positive hits). As a good practice, additional parameters such as date of birth and nationality should minimally be used to establish and dismiss false hits.

6.2 There should be documentation and maintenance of proper records by the insurer as to when screening was performed, the results of the screening and the assessment of screening results for all policies.

6.3 A record of all transactions referred to the Suspicious Transaction Reporting Office (“STRO”) should be maintained by an insurer, including the relevant internal findings and analysis.

6.4 In cases where an insurer maintains an internal database containing the list of designated individuals and entities for the purpose of screening, there should be clear documentation of when the internal database was most recently updated, as well as of the name of the person who carried out the update.

Notice

Notice to exporters 2019/07: OGEL for export of dual-use items to EU member states updated

Published 16 May 2019

Link:

Notice to Exporters 2018/07

Notice

Notice to Exporters 2019/08: 3 open general licences updated

Published 4 June 2019

Links:

Notice to Exporters 2019/08

Open General Trade Control Licence (maritime anti-piracy)

Open General Export Licence (export after exhibition of demonstration: military goods)

Open General Export Licence (Iraq)

On Thursday, OFAC issued amended versions of Venezuela General Licenses 7, 8 and 13. General Licenses 8 and 13 were extended through July 27th, while section a of General License 7 “automatically renews on the first day of each month, and is valued for a period of 18 months from the effective date of General License No. 7B or the date of any subsequent renewal of General License No. 7B, whichever is later.”

Mr. Watchlist does not understand this – if it is valid for 18 months, why does it need to renew each month?

Also, the authorization in section b said it is valid through April 28th, which has already passed. Was this a mistake, or did they mean 2020 (or some other date)?

OFAC also issued a single new, unrelated FAQ:

672. Can I export or reexport diluents to Venezuela? 

No.  Diluents (including, for example, crude oil and naphtha) play a key role in the transportation and exportation of Venezuelan petroleum, a primary source of revenue for the illegitimate and corrupt Maduro regime, which the United States seeks to restrict further.  OFAC is amending General Licenses (GLs) 7A, 8, and 13  effective as of June 6, 2019, to restrict U.S. persons engaging in transactions and activities authorized by those GLs from exporting or reexporting diluents, directly or indirectly, to Venezuela, or from engaging in transactions or activities related thereto. 

 

Absent authorization from OFAC, all U.S. persons continue to be prohibited from engaging in any dealings with Petróleos de Venezuela, S.A. (PdVSA), or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest.  In addition, non-U.S. persons could be subject to designation pursuant to Executive Order 13850, as amended, for operating within the oil sector of the Venezuelan economy, or for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of PdVSA, including the exportation or reexportation of diluents to PdVSA.  

 

Given PdVSA’s role as Venezuela’s state-owned oil company, exports or reexports of diluents to Venezuela likely include a direct or indirect interest of PdVSA.  As a result, persons directly or indirectly exporting or reexporting diluents to Venezuela should exercise enhanced due diligence to verify the ultimate end user and ensure that the transaction does not involve a direct or indirect interest of a sanctioned person, including PdVSA, even if the sanctioned person is not identified as a participant in the transaction. [06-06-2019] 

Links:

OFAC Notice

General License 7B

General License 8A

General License 13A

FAQ 672

Today, OFSI (part of HM Treasury) posted a new short document (4 pages including the cover image) about what sanctions on Russia will look like after the UK exits the European Union.

There are sections on asset freezes, transferable securities or money-market instruments (listing specific restricted firms), loan and credit arrangements, and Crimea-related investments. (If it cut and pasted better, I would post it, but…).

Link:

OFSI guidance

Link:

EU Notice

5 CUSTOMER DUE DILIGENCE AND SCREENING PROCEDURES

5.1 Screening of customers11 should be carried out against relevant ML/TF information sources, which include designated names of individuals and/or entities within:

(a) the lists and information provided by the Authority or other relevant authorities in Singapore in relation to ML/TF risks;

(b) the First Schedule of the TSOFA; and

(c) the MAS TFS Regulations.

5.2 In the context of direct insurance business, the screening of customers should include the screening of policy owners, insureds and claimants. In cases where an insurer has assessed the policy owner or insured to be of a higher ML/TF risk, the insurer should also screen the substantial shareholders (direct and indirect), beneficial owners, natural persons appointed to act on behalf of the customer and directors, if any, of the policy owner or insured.

5.3 In the context of reinsurance business, the screening of customers should include the screening of cedants and claimants12. Underlying insureds should also be screened in cases where they are made known to the reinsurers. In cases where a reinsurer has assessed the cedant or underlying insured to be of a higher ML/TF risk, the reinsurer should also screen the substantial shareholders (direct and indirect), beneficial owners and directors, if any, of the cedant or underlying insured.

5.4 Screening of customers should be conducted at the following points in time:

(a) before establishing business relations for new customers, otherwise as soon as reasonably practicable thereafter;

(b) prior to renewing business relations with existing customers;

(c) on a regular basis after the establishment of business relations13;

(d) when there are changes made to the lists14 mentioned in paragraph 5.1 above;

and

(e) before making claim payments to claimants15.

5.5 For the purposes of screening, the insurer should minimally, either:

(a) subscribe to a commercial sanctions database; or

(b) maintain an internal database containing the names of designated individuals

and entities.

5.6 The screening database(s) (i.e. commercial sanctions database and/or internally-

maintained database) and procedures adopted by an insurer should be effective in identifying individuals and entities with adverse information, as well as designated individuals and entities as defined in the First Schedule of the TSOFA and the MAS TFS Regulations, or as informed by the relevant authorities in Singapore.

5.7 In view of system limitations in screening capability, some insurers may not be able to effectively detect designated individuals or entities if they were to perform screening based on a full/exact match logic instead of a partial/fuzzy16 match logic for name searches. A full/exact name match for screening should not be used, as this will likely result in missed sanctions or adverse comments hits. In addition, the screening filters used by the insurer should not be limiting17 and should take into account the various permutations of a person’s first and last names.

5.8 Insurers are reminded that where screening results in a positive hit against the lists mentioned in paragraph 5.1, an insurer shall freeze without delay and without prior notice, the funds or other assets of designated persons and entities that it has control over, so as to comply with applicable laws and regulations in Singapore. This would include both the TSOFA and the MAS TFS Regulations relating to sanctions and freezing of assets of persons. Any such assets shall be reported promptly to the relevant authorities and an STR shall be filed.

5.9 Insurers should also have in place screening procedures when hiring employees, officers18 and agents19, and when establishing business relationships with offshore intermediaries. This should include, where applicable:

6

(a) background checks with past employers;

(b) credit history checks;

(c) screening against ML/TF information sources; and

(d) bankruptcy searches.