1SWIFT Latin American Regional Conference - 11-12 July 2013
The Evolution of Central Counterparty in Latin America and
the Need for More Oversight (Spanish)
Who, What, Where…
…and Iran and TBML too!
“Instead of being a secondary measure, as in the past, economic sanctions have
become a centerpiece of national security policy.”
- Washington Post 03/23/2011
Who is OFAC?
OFAC administers and enforces economic and
trade sanctions against targeted:
OFAC is Not a Bank Regulator
OFAC cannot mandate compliance
We can (and do) impose penalties for violations
We work with regulators to ensure compliance
by U.S. financial institutions
Jurisdiction – To Whom Does OFAC Apply?
• Individuals located anywhere in the world, doing business in the
United States or through U.S. persons
• Corporations located anywhere in the world, doing business in
the United States or through U.S. persons
– Transactions by foreign persons to extent they involve the United States;
– Transactions in property of blocked person within the United States;
– In limited circumstances, transactions involving
controlled U.S.-origin goods or technology.
OFAC Terminology: Blocking v. Rejecting
“Freezing” assets under
transfers or transactions
regarding the blocked
Title of blocked property
remains with sanctioned
Underlying transaction that
is prohibited, but contains
no “blockable” interest
U.S. person must simply
refuse to process the
Specially Designated Nationals (SDN) List
OFAC’s prohibited parties list
Over 6,000 individuals and
entities identified by OFAC
Individuals, entities, vessels,
banks all over the globe who are
owned, controlled by, or acting
on behalf of targeted
governments or groups
Active Sanctions Programs (23)
Balkans Iran North Korea
Belarus Iraq Sudan
Burma Lebanon Syria
Cote d’Ivoire Liberia Somalia
Congo Kingpin Narcotics Yemen
Diamond Trading Narcotics Trafficking Zimbabwe
Global Terrorism NPWMD
Comprehensive Sanctions Programs
Limited Sanctions Programs
• North Korea
Iran – OFAC designated 360+ names linked to Iran
(Weapons of mass destruction, support for terrorism, and Iran’s energy and trade).
o As a result of U.S. sanctions and outreach:
• Most foreign financial institutions have dramatically reduced their business w/ Iran.
• Those foreign financial institutions that run afoul of U.S. sanctions risk having their
access to the U.S. banking system restricted or being cut off
– Pursuant to CISADA, in July 2012 Treasury identified two foreign banks:
Kunlun Bank in China // Elaf Islamic Bank in Iraq.
• Reports indicate that Iranian oil-revenues have dropped by 50%
Burma –Sanctions targeted Burmese regime’s repression of democracy.
o As Burma made progress in political reform Treasury has eased sanctions
• Sanctions no longer prohibit U.S. persons from engaging in new investment in Burma
• Sanctions no longer prohibit U.S. banks from exporting financial services to Burma
AML Compliance & Onboarding Controls
Money Laundering Phases
Money laundering refers to the process of concealing the source of legally, illegally, and grey area obtained monies.
(means separating the illegally
obtained money from its source
through a series of financial transactions
that makes it difficult to trace the origin)
the illicit funds
into a seemingly legitimate form)
illegally obtained money
into the financial system)
How to Mitigate AML Risks
With 3rd parties?
What is THIS source of funds?
Compatible with income and wealth?
Compatible with business activity?
Suspicious transactions must be reported
Knowledge constant update
AML involvement in new products and structures
Training Sessions and Communication Memos
Who is the customer?
What is the source of funds?
Are there Negative News?
High Risk Customers
PEPs (Politically Exposed Persons),
SIAPs (Sensitive Industry Affected Persons),
SCAPs (Sensitive Country Affected Persons),
Media (Persons involved in scandals and proceedings).
AML Compliance main attributions
Basic AML (for
Contact and Questions
Silvana Mesquita – Tel . 55 11 33832536
SWIFT Latin American Regional Conference - 2013 11-12 July 2013 28