Insurers and other financial institutions are struggling to align measures that comply with the Sanctions Act with their specific risk profile. DNB determined that the level of compliance by some institutions is far from sufficient, for instance when too few in-depth measures are taken for investigating customers with a high risk profile. On the other hand, DNB found that many organizations are using excessive compliance measures.
The primary precondition to comply with the Sanctions Act is that an institution has a clear picture of its relations, including the structure, Ultimate Beneficial Owners (UBO’s), directors and agents. It is important that companies realize that it is not only important to check relations purely based on sanctions lists, but that they also proactively monitor the activities of their clients to detect any possible circumvention of the sanctions lists.
Jeroen Morrenhof (CEO at FRISS) recognizes the outcomes and explains: “With an effective risk analysis it is possible to avoid both a shortage and an excess of measures.”