In the life of a multinational corporation struggling with sanctions
Companies with large customer bases and extensive supply chains need to be particularly vigilant of all suppliers they do business with to ensure they are aware of the latest sanctions around the world. For example, in the US alone, a large multinational corporation would have to comply with both the OFAC and BIS (Bureau of Industry and Security) lists, which sounds easier said than done since these lists are updated regularly.
On February 23, 2024, the largest single-day OFAC sanctions package was imposed against Russia, targeting more than 500 individuals and entities in the financial, defense and procurement sectors. To uncover all companies – explicit and implicit – subject to these new sanctions, Bloomberg analyzed its extensive corporate structure and its subsidiaries’ databases and uncovered over 1,000 individual companies affected. In addition, the BIS added 95 entries to the entity list, including not only Russian entities but also entities supporting Russia’s war effort. Without researching the various sanctions reports or combing through comprehensive sanctions data, it would be very difficult to identify these types of companies.
In addition to the complex sanctions requirements in the United States, multinational corporations and financial firms must also keep an eye on European Union (EU) sanctions, which are also evolving. In February 2024, the EU adopted its thirteenth package of sanctions against individuals and organizations. These were again Russian companies, but also companies that support Russia with the aim of restricting Russia’s access to military technology. In addition to geographic regions, each multinational would also need to address APAC sanctions requirements and have a way to keep track of all of these different and overlapping sanctioned entities.
The requirements for cross-border sanctions are further complicated by the fact that ownership is not sufficient to identify all potential risks. A company controlled by a sanctioned person would expose itself to sanctions. Although there is overlap in many respects, separate restrictions have been implemented in Canada, Australia and other jurisdictions.
Navigating this complex, changing landscape is an urgent challenge for organizations today, and “best efforts” are often not enough. An automated program that identifies sanctions risks in real time is ideal for companies that want to operate their business with the least amount of effort and the greatest possible security.
How can Bloomberg help?
To help customers optimize their compliance program and stay on top of sanctions worldwide, Bloomberg offers a comprehensive data solution for enterprise-wide use.
Bloomberg’s global team of regulatory experts actively monitors the sector’s official websites where new sanctions packages are announced and uses this information to update Bloomberg’s Sanctions Data Solution as quickly as possible following the release of new information.
The solution provides several key data required to implement a robust compliance solution. Bloomberg provides a corporate-level sanctions record to help identify all companies subject to sanctions. The corporate structure database maintained by Bloomberg enables the systematic identification of potential risks, both explicit and implicit. In addition, due to the extensive database of security level data, Bloomberg can apply the sanctions at the security level. This is important because some sanctions regimes differentiate between security types and issuance dates. Therefore, although a company may be subject to sanctions, not all securities issued by that company are necessarily subject to sanctions. In addition, Bloomberg also provides a look-through fund analysis to identify risk at the fund constituent level that may pose regulatory risk to fund holders. Bloomberg’s data also has SOC 2 and SOC 3 certifications, demonstrating the company’s commitment to data quality.
To learn more about Bloomberg’s Sanctions Data Solution, click here or request a demo here.