Ripjar was born out of the UK Intelligence Community; this heritage gives us a unique perspective on understanding how frequently national security risks cross-over into the risk management concerns of enterprise organisations, especially when it comes to addressing the compliance risks associated with economic sanctions. Today, Ripjar exploits powerful machine learning algorithms to discover threats, helping our customers around the world develop a better understanding of their risk exposure, in particular in this cross-over space of national security and enterprise risk.
Deployed by governments around the world, sanctions regulations are not just a question of checking names against a watchlist when doing business with high-risk clients but require companies to consider a spectrum of risks. Ransomware attacks, for example, may force a business to pay money to free up internal systems and, by doing so, unwittingly violate sanctions restriction, and incur significant financial or even criminal penalties.
Sanctions present an evolving regulatory risk for all businesses, but some organisations, such as telecommunications companies, with complex internal networks often spread across different jurisdictions, must be especially vigilant for emerging vulnerabilities, work harder to understand who is using their services, and be ready to adapt their compliance solutions as the global landscape changes.
Sanctions are often seen as a big-ticket foreign policy and national security tool, used to target hostile regimes or their leaders to achieve diplomatic goals or punish crimes such as treaty violations or human rights abuses. Most recently, for example, Western countries acted collectively to impose an unprecedented number of sanctions against Russian oligarchs and politicians following Vladimir Putin’s unprovoked invasion of Ukraine in February 2022.
But sanctions are not just about punishing high profile leaders or personalities. In the 21st century, Western governments have trended towards ‘smarter’ sanctions that expose and curtail specific crimes and activities, including individuals funding and facilitating terrorist networks. Sanctions have become a multi-faceted tool to combat adversaries in a variety of ways, cutting off trade links, freezing assets, preventing travel, and addressing malicious activities such as cyber-attacks or ransomware attacks.
The complexity of modern sanctions is a significant compliance challenge – one that is increased by the potential scale and volume of the sanction’s requirements, which can change rapidly along with geopolitical events. The Russian invasion of Ukraine saw the US, the UK, the EU, and Canada, along with other countries impose over 18,000 sanctions against Vladmir Putin’s regime and its supporters, with a crippling effect on the Russia’s commercial landscape. Since then, as the conflict progressed, Western countries have expanded sanctions, adding 23% since the conflict began, including measures against Russia’s ally, Belarus.
For large telecommunications companies, the administrative burden of sanctions compliance, and in particular compliance with Russia-Ukraine sanctions programs, should be a priority. As Russia sanctions have expanded, so too have their compliance challenges. The National Crime Agency notes that the Russian oligarchs that have enabled their country’s aggression against Ukraine employ numerous strategies to evade sanctions, including using shell companies or proxies to transfer assets, making investments in foreign businesses, or selling assets (often at a loss) before sanctions measures kick in.
Adding to the challenge for larger companies, and especially telecommunications, is the volume of customers that must be monitored, and data that must be analysed. Some of these organisations have tens of millions of customers, meaning the scope of their compliance solution must cover multiple jurisdictions, and potentially account for multiple languages and naming conventions.
Importance of sanctions
While sanctions compliance is a challenge, it is important to remain focused on their impact and the positive benefits of their effective implementation. Telecommunications companies have the power to significantly aid national security objectives through effective sanctions compliance, not only cutting off support for international criminals, and identifying the proceeds of their crimes, but ensuring they are not able to use networking and digital services to move assets which may cause harm and damage in areas all over the world.
With that in mind, it is important that telecommunications companies keep an eye on the global horizon and be ready to adapt quickly and efficiently when new sanctions measures are introduced – not only to ensure their effectiveness, but to minimise risk and service disruption. Looking beyond the Ukraine invasion, the United States recently issued new restrictions on the export of microchips to China with the objective of preventing its development of advanced supercomputers for military applications. The Biden administration has signalled that it will be working on other ways to “strengthen America’s position against China” and will be urging its allies to follow suit in imposing new export restrictions.
The evolution of China sanctions demonstrates the speed with which the global landscape can change, and the constant state of readiness that firms must develop to deal with new compliance risks. With that challenge in mind, Ripjar works to help companies develop their own advanced sanctions and risk management solutions.
CEO, Ripjar Ltd
To learn more about how Ripjar can help you address sanctions risks, contact us today.