To comply with sanctions rules, corporations must consider ownership and control of their customers and business partners – including indirect ownership and control, which can be difficult to determine.
Doing business with a directly sanctioned entity poses risks, but entities can also be “indirectly” sanctioned, or sanctioned “by extension”, owing to their ownership or control. Identifying such entities can be complicated and time-consuming without the proper systems and data.
A robust sanctions compliance program should include ownership and control requirements that consider:
- How indirect ownership and control affects supply chains
- Ownership percentages in the aggregate
- Director and ownership control
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