©2010 Dow Jones & Company Evolving Sanctions Landscape and its impact on AML Compliance Executive Briefing – Lloyds of London – 29 th February 2012 Dan Mendelsson; Solution Specialist Jeremy Doyle; Content Integration Specialist

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Arab Spring 3

©2010 Dow Jones & Company Syria 4

©2010 Dow Jones & Company IRAN 5

©2010 Dow Jones & Company *Source: MyPrivateBanking - Switzerland The Arab Spring – Ramifications Attractive growth opportunity has transformed to a damage limitation exercise 15% of the $1.5 trillion deposited from the region in foreign bank accounts is generated from corruption* Calls to recover public assets stolen by corrupt politicians

©2010 Dow Jones & Company

Today’s evolving Sanctions landscape Arab Spring: new sanctions regimes introduced or extended overnight New US Executive Order targeting Syria quickly followed by new EU and Swiss sanctions Aggressive US enforcement of CISADA sanctions regulations against Iran Sanctions requirements growing in scope, complexity and size, extending to a range of state controlled companies: - Banks and insurers - Petroleum companies - Shipping companies - Industrial conglomerates

©2010 Dow Jones & Company State-Owned Entity information for AML/CTF screening – 3,500+ state-owned companies from Libya, Iran and 7 other jurisdictions – ~ 40% of these companies are not yet on sanctions lists – Includes profiles of companies fully or partially-owned by sovereign wealth funds New “Enhanced Country Risk” category that identifies companies associated with governments from sanctioned jurisdictions

©2010 Dow Jones & Company Sanctions compliance and vessel information Imo – Ships lists specifically on OFAC list; details now included in details of EU sanctions targets Identification of sanctions risk is a specific compliance challenge – Flag, Name and other identifying features may change – Complex/paper-based Trade Finance documentation Concern that Iran is circumventing sanctions régimes by re-naming and reflagging vessels International Maritime Organization (IMO) number is a unique characteristic of a vessel – IMO remains constant; valuable as the compliance key to identification of sanctions risk

©2010 Dow Jones & Company Increasing cost of sanctions compliance Regulatory developments are adding to the existing pressures faced by compliance departments Compliance Consequences -More risks to be identified & managed -Significant and sustained operational impact -Increased visibility and accountability to senior executives -Threat of substantial penalties and reputation damage So how are institutions managing? Achieving Global Sanctions Compliance: Challenges and Solutions

©2010 Dow Jones & Company

AML challenges facing organisations

©2010 Dow Jones & Company Key findings – AML workloads increasing

©2010 Dow Jones & Company False positives are still an area of concern

©2010 Dow Jones & Company Too few are confident in data accuracy

©2010 Dow Jones & Company Difficult to screen OFAC lists against names data in Chinese script – Many ways to transcribe Chinese characters into Roman scripts – Taiwan had 4 different official standards in 10 years – Unofficial standards are common HMT screening & Chinese language names 賴英照 In-Jaw Lai = Yingzhao Lai Ying-Jaw Lai

©2010 Dow Jones & Company Introducing Dow Jones Risk & Compliance 19 Objective: To be a leading provider of risk identification information and research services that protect our customers from regulatory, commercial or reputation risk Anti-Money Laundering Anti-CorruptionAnti-FraudPayments IdentifyInvestigateMonitor Data News & Analysis Research

©2010 Dow Jones & Company Closing thoughts The adoption of Sanctions as a means of political and economic influence is on the increase. Such increases are putting additional pressure on regulated organisations with increased work load and desire for more resources at a time of austerity. Using the correct type of sanction content for specific business needs is an effective way of improving operational efficiency with out jeopardising compliance integrity. Businesses with exposure to China or those looking to expand into this region are now seeking support with the challenges associated with Chinese Commercial Code and sanction screening of transactions.

©2010 Dow Jones & Company Connect with us Jeremy Doyle Content Integration Specialist Dan Mendelsson Solution Specialist