AML POLICY
Carrots
and
sticks…
and
sanctions
F
rom behind a bank of computer
monitors, performing day-to-day
compliance operations, it is easy to
see economic sanctions as a binary
thing: sanctions targets are persona
non grata , and everyone else is not.
However, from a policy level, sanctions
are a much more multifaceted tool of
statecraft that provides great flexibility in
both exerting pressure and minimizing
the impact on one’s own economy.
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ACAMS TODAY | SE PTEMBER–NOVEMBER 2017 | ACAMS.ORG | ACAMSTODAY.ORG
Who is sanctioned?
The first area where regulators can show flexibil-
ity is in the designation process. Designations are
generally very specific, although the Office of For-
eign Assets Control (OFAC) 50 Percent Rule (and
its equivalents elsewhere in the world) signifi-
cantly expands the reach to parties related to
those designated. On the other hand, the wording
of regulation or government order (e.g., Executive
Orders in the U.S.) make whole classes of people
subject to sanctions as long as there is knowledge
that a person or entity meets the definition of
those subject to sanctions. Those documents typ-
ically cover specific ranges of actions taken in the
past (e.g., participation in the assassination of
Lebanese officials) or on an ongoing basis (e.g.,