Sanctions is a general term used to refer to non-military actions adopted by national governments or international organisations (primarily the UN Security Council and the EU) to further their foreign and security policy objectives. Sanctions are economic or diplomatic restrictions imposed on a state, a regime, companies, or individuals. The purpose of sanctions is to encourage change in the policies or conduct of those targeted, for example by limiting the party’s economic and material ability to commit undesirable acts.
DNB is exposed to international sanctions regimes in several respects. Firstly, DNB’s business operations involve a number of parties in many different countries, including employees, customers, suppliers, correspondent banks and other business partners, as well as public authorities. Secondly, the DNB Group provides and purchases products and services that may directly or indirectly involve exposure to international sanctions. Thirdly, our customers’ business partners may represent a sanctions risk for DNB if DNB is involved in transactions with these third parties.
Among other things, DNB is required to freeze transactions that are in violation of international sanctions. Furthermore, we must not be misused to circumvent rules and legislation. We therefore screen our customers and their transactions against sanctions lists. However, screening alone is not enough, which is why we must know our customers. We must also ensure that we have up-to-date knowledge of relevant rules and legislation. These are subject to frequent changes, and different parts of the DNB Group’s areas of operation are subject to different sanctions regimes.
The authorities, both national and international, have high expectations of financial institutions to develop, implement and routinely update a sanctions compliance programme. The programme must be adapted to the company’s risk exposure.
Performing risk assessments is a basic prerequisite for identifying, assessing and managing DNB’s sanctions risk. Risk assessments are therefore the foundation of DNB’s sanctions compliance programme.
DNBs assesment of sancions riskAs mentioned above, the DNB Group must understand the risks we are exposed to. Here is the official risk assessment of our exposure to risks related to breaches of international sanctions.