Private Sector Lacks Knowledge for Economic Sanctions Compliance, Implementation, Report Says

There are “significant gaps” in private sector knowledge on North Korea and Iran sanctions compliance and implementation, according to a Feb. 6 report by the Royal United Services Institute and the Association of Certified Anti-Money Laundering Specialists. The report, based on more than 350 responses to a survey sent to the finance industry, shows that large, international banks have a greater grasp of sanctions compliance than local and national banks, which are more often “being exploited” by proliferators. The report also said that U.S. banks are most vulnerable to proliferation risks from Iran and that “few banks” consult the United Nations Panel of Experts reports on North Korea.

The report also said that about 66 percent of the respondents do not conduct a “standalone proliferation finance risk assessment,” and more than 60 percent said it is “challenging” to incorporate lists of dual-use goods into their compliance monitoring regimes. About one-fourth said the industry is doing a “good job” of “identifying the financing of dual-use and sensitive goods,” the report said. Thirty-one percent of the respondents said the industry is doing a “bad job,” while 45 percent said they “don’t know” how the industry is doing on that front.