The Bankers Association for Finance and Trade (BAFT) published this week a guidance paper, which provides clarity on sanction requirements for transactions related to the shipment of goods.
The paper, “Guiding Principles for Sanctions Issues Related to Shipping and Financial Products”, serves as guidance to help banks remain in compliance with complicated scenarios related to sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury. The sanctions prohibit direct transactions with sanctioned parties, direct and indirect exports, and re-exports to sanctioned territories.
“Economic sanctions obligations for financial institutions aren’t always black and white,” Stacey Facter, senior vice president of trade products at BAFT, said. “The purpose of this paper is to provide further clarity as to which types of transactions may be prohibited and minimize interpretive deviations for those on the front lines of sanctions compliance.”
The paper was developed by a joint working group that consisted of members of BAFT and The Clearing House, an association of the largest commercial banks. The group was made up of sanctions experts from the world’s leading U.S. and international financial institutions.
BAFT promotes sound financial practices for international transaction banking and engages institutions, service providers and the regulatory community on a wide range of topics affecting transaction banking, including trade finance, payments, and compliance.