Association of Certified Sanctions Specialists (ACSS)

2020 ACSS
VIRTUAL
SANCTIONS
SUMMIT
www.sanctionsassociation.org
 Automated Identification of
Control Relationships for your Pre-trade Sanction
Screening
July 23, 2020 11:40 am – 12:15 pm ET
Pre-Recorded session: 11:40am – 12:05 pm ET
Live Q&A with audience: 12:05 – 12:15 pm ET

Association of Certified Sanctions Specialists (ACSS)

www.sanctionsassociation.org
Speakers Moderator

Oliver Bodmer Arne Petter Omholt Anna Sayre

Senior Product Manager CEO Director of Content
SIX Group T-rank AS Association of Certified Sanctions
Specialists (ACSS)

www.sanctionsassociation.org
 30+ Global Sanctions

2 Sectorial Sanctions
on Russia / Ukraine conflict and Venezuela

10 Sanctioned Russian Oligarchs

86 remain on US Treasury watch-list

2020 van Holland “China” sanctions bill

Successful navigation of the

sanctions landscape
is more difficult than ever
 AU CA CH EU HK OFAC SG UK UN

AFGHANISTAN N N
AL-QAIDA N N N N N N N N

Successful Navigation of The

BALKANS N
BELARUS N N N N
BURMA N
BURUNDI N N N N
CENTRAL AFRICAN REPUBLIC N N N N N N N N N

Sanctions Landscape is More

CUBA N
DARFUR N
DEMOCRATIC REPUBLIC OF THE CONGO N N N N N N N N N

EGYPT N N

Difficult Than Ever

IRAN N N N N N N N N N
IRAQ N N N N N N N N N
IVORY COAST N N N N N N N
LEBANON N
LIBERIA N
LIBYA N N N N N N N N N
NORTH KOREA N N N N N N N N N
PALESTINE N
REPUBLIC OF GUINEA N N N
REPUBLIC OF GUINEA-BISSAU N N N N N N

• What regulator(s) need to be followed SOMALIA

SOUTH SUDAN
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
SUDAN N N N N N N N N N

• Normalization across regulators SYRIA

TALIBAN
N
N N
N N
N
N
N
N
N
TUNISIA N N
• Complexity in sectoral sanctions UKRAINE
UKRAINE/RUSSIA
N
N N
N
N N N
VENEZUELA N N
YEMEN N N N N N N N N N
ZIMBABWE N N N N N

Association of Certified Sanctions Specialists (ACSS)

www.sanctionsassociation.org
To Maintain a Clear View a Wealth of Data Needs
to Be Linked and Analyzed
Core Security Corporate Ownership /
Data Actions Control

Security Company Regulator

Underlying Structures Updates

Association of Certified Sanctions Specialists (ACSS)

www.sanctionsassociation.org
Everyday Market Changes Impact EXAMPLE
Whether a Security is Sanctioned RU000A0JPMT8 has been issued by Russian

or Not Agricultural Bank JSC which is linked to

sanctioned parent ROSSELKHOZBANK by a
• Corporate actions direct or indirect ownership of 50% at least.
• Capital increases Having been issued prior to sanctions taking
• New sanctions imposed by a regulator effect or underlying specific sanctions

• Change of ownership / management regime, the security is NOT (yet) considered

sanctioned at this stage. The security is
Active and thus the status could change in
Keeping your database up to date for pre- and post- trade
the future.
suitability is a challenge and a significant risk

Association of Certified Sanctions Specialists (ACSS)

www.sanctionsassociation.org
Analyzing Company Trees
• Starting with sanctioned individuals and entities from several
regulators <50% >50% >50%

• Analyzing company ownership trees upwards and downwards

• Applying the 50-percent rule to identify additional companies
• Direct & Indirect ownership / control

>35% >35%

Association of Certified Sanctions Specialists (ACSS)

www.sanctionsassociation.org
• Control is supposed to be
easy
• Above 50% + one share on
every level

But there are ways to hide

control:
1. Circular ownership
2. De facto control

Association of Certified Sanctions Specialists (ACSS)

www.sanctionsassociation.org
 IVAN IS IN CONTROL OF
UDACHA
Circular Ownership Creates
a Difference Between the
Direct and the Indirect
Ownership

Association of Certified Sanctions Specialists (ACSS)

www.sanctionsassociation.org
Circular OLEKSANDR IS IN CONTROL OF THE RED BOX

Ownership can
be Complex

Association of Certified Sanctions Specialists (ACSS)

www.sanctionsassociation.org
De Facto Control – Control
Despite Less than 50%
Ownership • There is only one combination where the
small owners can beat the large owner

IFRS 10 B43: • The large owner will get his will in 218-2
“...an investor holds significantly more voting rights than any other vote of the voting combinations
holder or organised group of vote holders, and the other shareholdings
are widely dispersed, it may be clear,…….,that the investor has power
over the investee”

Association of Certified Sanctions Specialists (ACSS)

www.sanctionsassociation.org
Example: Flagged Chinese individual
controlling a US company according to de
facto control

This 36% link is in fact a controlling

link

Association of Certified Sanctions Specialists (ACSS)

www.sanctionsassociation.org
Close Up of the Controlling
Structure
The distributed ownership of NINGBO
JOYSON ELECTRONIC CORP. (33 small
owners) makes MR JIANFENG WANG a
controlling owner according to de facto
control

Association of Certified Sanctions Specialists (ACSS)

www.sanctionsassociation.org
SIX, BvD and T-rank Support a Fully
Automated Process

INFORMATION
PROVIDERS BvD T-rank SIX The client

Data feed/API Data feed/API Data feed/API

Association of Certified Sanctions Specialists (ACSS)

www.sanctionsassociation.org
Association of Certified Sanctions Specialists (ACSS)
www.sanctionsassociation.org
Questions for our Speakers?
Join us for the Live Q&A Session directly
following this Panel.

Association of Certified Sanctions Specialists (ACSS)

www.sanctionsassociation.org
 SIGN UP TODAY AT
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