March 14, 2017
This article features in Money Laundering Bulletin (www.moneylaunderingbulletin.com)

So, you have just graduated from college, and you need a job. What career should you pursue? You might be wise to consider the growing field of sanctions compliance, say Saskia Rietbroek and Anna Sayre.

In the U.S. alone, compliance with regulations imposed by the Treasury Department’s Office of Foreign Assets Control (OFAC) and Commerce Department’s Bureau of Industry and Security (BIS) is gaining growing attention from the human resources departments of corporate and financial institutions looking to fill new or expand present positions.

Jobs across the corporate spectrum

If anyone wants proof that economic sanctions and export controls offer broad and well-paying job opportunities, they need look no further than websites such as Indeed, Career Builder, Monster, and LinkedIn.

Most roles pertaining to sanctions can be found at big banks and financial institutions, like HSBC, Santander, and KPMG, as well as with the sanctions regulator in your country (e.g. OFAC or BIS in the US; Her Majesty’s (HM) Treasury in the UK). Such jobs carry titles like:

  • Sanctions Advisor
  • Sanctions Consultant
  • Sanctions Investigator
  • OFAC Sanctions Specialist;
  • Anti-Money Laundering Analyst – Sanctions
  • AML Advisory & Sanctions Analyst
  • Director, Program Management (AML/Trade Sanctions)

Outside of the banking sector, sanctions/trade controls compliance professionals are also being hired by a wide-range of non-financial companies, such as Uber, Amazon, British American Tobacco, and the Terumo Medical Corporation.

Most of the entry-level jobs require a person to be B.A. level degree educated, and possess some experience working in a relevant environment such as retail banking or law. Desirable qualities usually include confidence and exceptional judgement, high-level spoken and written skills, and a comprehensive knowledge of risk management.

Increased enforcement leads to increased hirings

The field of sanctions and trade control compliance is growing due to increased enforcement by government agencies. In the last decade, there has been a rise in the number of monetary penalties imposed by the US sanctions regulator, OFAC, as well as in the filing by the U.S. Justice Department of criminal cases involving OFAC violations and legal actions by individual states against financial institutions for sanctions violations, as has occurred in New York. The UK has also recently tightened its grip on sanctions violators by formally creating the OFAC-inspired Office of Financial Sanctions Implementation (OFSI) in April 2016.

“I think it is likely that there will be an increase in positions within the sanctions field.

I mean, in some cases, anti-money laundering operations including sanctions at financial institutions have tripled in size in the last two decades,” says Salvatore Scotto, former Head of Sanctions at HSBC North America and current Chief Executive Officer at Sanctions Forensics & FCC Advisory Services in New York.

In a similar vein, Sanjeev Menon, Senior Practice Area Manager for Compliance & Legal at Infinity Consulting Solutions, Inc. in New York agrees that,“record fines and super-strict regulatory examinations have compelled banks and financial institutions to loosen their purse strings enough to increase hiring. We are constantly being engaged on new AML/BSA [Bank Secrecy Act] searches at all levels for all types of banks and organizations. Some banks are looking for senior level program leaders to come in and shake up their respective programs; others are looking for contract staff and consultants to perform look-backs and remediations. However, most of our clients are looking for both.”

Mr Menon goes on to say, “The real development from OFAC enforcement has been the business of transaction monitoring. There are a number of firms that have grown in size and reputation based on an initial monitoring gig.”

“As long as US federal regulators and NYDFS [New York Department of Financial Services] are on the prowl, we will continue to see fines, which will lead to rapid hiring”, he adds.

Sanctions compliance becoming “more important” for banking regulators

In a January 2017 SanctionsAlert.com audience poll, among approximately 1000 webinar attendees, nearly 80% of attendees said that compared to five years ago, the OFAC portion of the Bank Secrecy Act/Anti-Money Laundering Examination conducted by U.S. federal bank examiners has become “more important”.

“Internationally, you see regulators also taking a more robust stance, such as the UK, and I think a lot of countries are realizing that bad actors in one location in the world can cause reputational damage to everybody else along the way. So, I think sanctions are here to stay, which means you need to have the proper people and programs in place to do the job. In that way, I think it is a good career,” confirms Mr Scotto.

Lofty origins

The U.S. Treasury Department has a long history of dealing with sanctions, dating back before the War of 1812.At that time, Secretary of the Treasury, Albert Gallatin, administered sanctions that were imposed against Great Britain for harassing American sailors. Later, during the Civil War, Congress would approve a law that prohibited transactions with the Confederacy and even provided a licensing regime under rules and regulations administered by the Treasury Department.

However, the origins of sanctions regulation go back even further. In the UK, a form of sanctions regulation was imposed as early as the 13th century. In 1293, King Henry III was the first to issue what would later become known as a privateering commission, or a license granted to specific individuals to seize the King’s enemies at sea in return for splitting any spoils with the crown. By the 16th century, the licensing of privateers during times of war became widespread in Europe, during which time most countries in Europe began to enact laws regulating and granting what were known as‘letters of marque and reprisal’.These powerful legal instruments authorized the engagement of third parties to pursue and, if necessary, attack and capture enemy ships at sea.

In fact, a direct link to economic sanctions is provided in Article I, Section 8 of the U.S. Constitution, which gives the U.S. Congress the power to “grant letters of marque and reprisal”. Thus, the tens of thousands of sanctions compliance and trade control compliance officers at businesses and financial institutions throughout the U.S. can say with just pride that their jobs were in fact preordained by the founding fathers themselves, having been conceived at the Constitutional Convention in Philadelphia in 1787. No other compliance position in the U.S. can claim such lofty origins.

Both UK and U.S. sanctions compliance officers form an integral part of their country’s history and foreign policy establishment by executing and overseeing the proper implementation of foreign policy measures authorized by their respective governments.

Complex sanctions create ‘confusion’

Sanctions compliance responsibilities are becoming more and more time consuming to perform. According to a SanctionsAlert.com survey of compliance professionals conducted in 2016 [1], 53% of those polled felt that sanctions responsibilities are more time-consuming now than they were three years ago.

These findings highlight the diverse challenges that come with sanctions compliance functions and of stricter Know Your Customer (KYC) requirements upon which regulators insist. They also reflect the constant changes in government sanctions programs and the increasingly risky regulatory environment.

In the same survey, respondents often cited concerns about the duties brought on by transaction monitoring, which is aimed at detecting prohibited parties and entities, including false positives. They expressed frustration in understanding the logic of automated sanctions screening filters as well as a lack of user-friendly OFAC and other “do not touch” lists.

The complexity of sanctions programs was also noted as a concern. Respondents blamed a lack of clarify in what is permitted under the sanctions programs. One respondent said, “There are so many nuances to some sanctions programs, it can be confusing.”Another survey respondent said, “I don’t feel current guidance is specific enough to help navigate.”A further respondent said the lack of feedback from government agencies concerning the sufficiency of compliance programs leads to compliance uncertainty.

Two types of people in sanctions compliance

“There are two types of people in this field: first of all, there are the ones who have been operations officers and risen in the business with practical banking knowledge, typically relating to wire transfers and international transactions” says Mr Scotto.“Right out of school, I started working for Manufacturers Hanover Trust, a commercial bank in New York, in securities clearance. Afterwards, I stayed in banking in various positions, many times positions that included a lot of securities clearance work.

“Then there are those coming in out of law school who would rather do compliance work than be typical lawyers.

“These two positions marry very well: one intimately understands the banking business and the other helps with the interpretation of the law. A lot of people right now have been focusing on the enforcement actions against sanctions programs, and as a result, many companies are starting to hire those people who can help to remediate their program deficiencies,” Mr Scotto adds.

“A lot of pressure”, yet “Never a dull moment”

The day to day in the life of a sanctions professional can vary depending on whether it involves a more operational or legal role; however, you should be prepared to deal with a fair amount of daily pressure.

“There are compliance professionals in financial institutions who sit very closely to an operations unit and they have literally hundreds of alerts each day, and there is a lot of pressure to get those alerts cleared every day – and also a lot of pressure to do it correctly. An average person is looking at reviewing 200-500 transactions per day, and if your career depends on getting it right – that’s a lot of pressure,” says Mr Scotto.

“There are other investigators whose main job is to evaluate sanctions risk, for a person, product, etc. That job is slightly more complicated and it’s necessary to keep on top of all the changes, as sanctions are constantly changing,” he adds.

Associate of Steptoe & Johnson LLP in Washington DC, Peter Jeydel, says what he loves about the sanctions field is that “every day is different”. “OFAC or some other agency comes out with a major development nearly every day, and client needs vary on a daily basis accordingly. In addition, you have to factor foreign policy and national security issues, and their changing trends, into every piece of advice you provide”, says Jeydel.

Counsel at Berliner, Corcoran & Rowe (BCR) in Washington DC,Michelle Turner Roberts,describes her experience by saying,“a sanctions practice gives you the opportunity to have both individuals as well as large multinational corporations as clients; the legal and regulatory landscape is constantly changing, so there’s never a dull moment; and it’s a challenging area of the law to master, which keeps it interesting”.

Skills to cultivate

In response to a question about what skills people looking to pursue a career in sanctions should cultivate, Mr Scotto says: “It is really down to reasoning and deduction. To some degree, it is also being able to do proper investigations as well. A person should be able to accurately analyze sanctions alerts, the elements of a transaction, and to apply the correct rule.”

Mr Scotto continues by saying, “I would try and find a compliance role in AML and then move into sanctions, or try to specialize in transactions or wire transfers as a trade finance person. Joining organizations is also very helpful because you have a chance to network and meet people in the industry.”

Mrs Turner Roberts reiterates the importance of connections: “My advice for those interested in this field would be to identify practitioners in the area, and law firms with sanctions practices, and network, network, network. It is usually easier to get experience in sanctions working for firms in private practice than in seeking a job with a regulatory agency.”

With regard to lawyers trying to break into the sanctions field, partner at Dentonsin Brussels, NadiyaNychay, shares that, “one of the important components of the work is having a good understanding of the geopolitical situation in the world. I would encourage anyone who wishes to work in this field to follow the developments in international politics and international relations.”

Mr Jeydel tells us that breaking into the industry requires a persistent, targeted search.He recommends that “young attorneys read law firm alerts in order to learn a bit about the substance of the field and see if it interests them and which firms to target for jobs. There are not a lot of accessible ways to learn about this type of law, and law firm alerts are probably the best way”.

Note

  1. SanctionsAlert.com received survey results from 109 compliance practitioners worldwide, including persons who work at banks, insurance companies, credit unions, securities and asset management firms, oil and gas, federal and state law enforcement agencies, software firms, and law firms. More than half (55%) the respondents had worked in the general compliance field for more than 10 years, and slightly more than one-third (34%) say they spend more than half of their job responsibilities on sanctions compliance.

Saskia Rietbroek, CAMS, is Principal at www.SanctionsAlert.com. Anna Sayre is Legal Content Writer at www.SanctionsAlert.com

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