President Trump’s EO 13894 technically imposes sanctions on three PEPs and on Ministry of Energy & Natural Resources along with the Ministry of National Defense.

Yet this is the tip of the Sanction Iceberg.  Here is why.

1.     The energy and defense sectors in Turkey are dominated by large number of State-owned enterprises, often owned by the Ministries in question along with hundreds of subsidiaries and indirect entity exposure links.

2.     The term entity is defined in EO 13894 “partnership, association, trust, joint venture, corporation, group, subgroup, or other organization” which often may spill over non-Turkish companies in joint venture in Turkey in those sectors;

3.     Needless to say, OFAC’s 50% rule will be applied to “entities in which one or more of such ministries own, directly or indirectly, a 50% stake”.

Traditional legacy monitoring systems are not able to keep up with regulation’s complexity. Lack of market data being another issue.  

Interestingly enough, the first OFAC fines in relation to similarly designed Ukraine-related sanctions against Cobham Holdings blamed legacy Compliance Software failures to detect indirect sanction exposure.

When was last time your FI has upgraded its Compliance & Sanction monitoring systems from simple table based systems to next gen AI powered solutions?

Are you willing to test the robustness of your current solutions? Let’s try for free, give us a ring at +41 22 340 22 00 or send us an email at info@polixis.com.