The Convergence of ABC, AML and Export C...

Mike Huneke and Jan Dunin-Wasowicz join Tom Fox on this episode of All Things Investigation, to shed light on key ideas and challenges faced by companies and compliance professionals in the evolving landscape of trade sanctions and anti corruption compliance. They explore the shift from traditional know your customer (KYC) practices to a more comprehensive anti-corruption mindset, the impact of sanctions on various sectors in Europe as well as the convergence of anti-evasion practices. Focusing on the recent emphasis on trade sanctions and their impact on global business, Mike and Jan offer valuable insights and practical guidance for companies navigating these complex regulatory landscapes.

Mike Huneke and Jan Dunin-Wasowicz are partners at Hughes Hubbard and Reed. They are both anti-corruption lawyers with a passion for bridging the gap between ABC and trade sanctions compliance. Mike and Jan provide valuable expertise to companies seeking to align their risk management strategies with the evolving regulatory landscape.

You’ll hear Tom, Mike and Jan discuss:

• The impact of the Russian invasion of Ukraine and the subsequent trade sanctions imposed by the US and Europe.
• Companies need to move beyond traditional KYC analysis and adopt an anti-corruption mindset when dealing with trade sanctions compliance. Mike emphasizes that this shift requires companies to proactively identify and address high-risk countries, red flags, and evasion techniques.
• The challenges posed by sophisticated evasion schemes and the importance of adopting a holistic approach that combines the expertise of anticorruption and export controls teams.
• A new geography of sanctions risks has emerged, with companies having to navigate potential risks not only directly linked to Russia but also arising from the global ripple effects. It’s therefore important to incorporate a dynamic and flexible framework that can adapt to changing geopolitical dynamics and future risks beyond the current focus on Russia.
• Jan points out that with the imposition of Russia sanctions, entire segments of the European economy are affected by controls and measures. This extends beyond financial institutions and requires operators in different sectors to learn about and navigate sanctions compliance, leading to a steep learning curve.
• In-house compliance departments need to address trade sanctions risks, with a focus on collaboration between anti-corruption and export controls teams to identify and address the highest risks of evasion.
• The convergence of anti-corruption and trade sanctions compliance: The focus is on combating evasion techniques, such as the use of third parties and assessing risks to prevent bribery and sanctions violations.
• Compliance professionals and companies face increasing pressure and find themselves in complex situations. The goal is to develop frameworks and methods that help professionals navigate and operate in a world that is becoming more complicated by the day.

KEY QUOTES:

"KYC is dead, and you have to apply an anti-corruption mindset to trade sanctions compliance." - Mike Huneke

"If those two teams work together, I think you can identify very defensible and well-documented ways to identify what are the highest risks of evasion and then taking that skepticism and maybe paranoia that we develop in the anticorruption space and applying it to those select transactions." - Mike Huneke

"Two-thirds of the world population live in countries that haven't imposed sanctions on Russia or simply don't really care for the sanctions in Russia." - Jan Dunin-Wasowicz

"The goal here, really, in this exercise is to formulate a framework, formulate a method to look at this problem, to make the life of an in-house lawyer compliance professional a little easier." - Jan Dunin-Wasowicz 

Resources:

Hughes Hubbard & Reed website

Mike Huneke on LinkedIn

Jan Dunin-Wasowicz on LinkedIn