The US have issued further economic sanctions against Iran in the wake of the drone attacks on Israel, so this week, I want to talk about why it is so important to stay on top of any and all sanction announcements.
If you’re running a security master or entity master, it’s absolutely critical to be completely current with the very latest sanctions as they can have a profound effect on the instruments your organization is buying, recommending or managing.
The new sanctions the US have imposed (pursuant to Executive Orders 13902 and 13846) on Iran are targeted, focused specifically on the petrochemical and oil industries, and supportive shipment firms.
The bottom line? There are, in fact, thousands of sanctions as well as watchlists and lists of PEPs (politically exposed persons) being imposed by various countries around the world at any given time.
Just like one needs the credit rating of an issuer or the instrument rating of a bond, one needs to know what has been sanctioned. If you are not aware, you are not only running reputational risk, but you are also running an economic risk, with potential fines or the inability to sell sanctioned products.
There are many data providers that regularly scan and scrape lists of the various sanctions imposed by governments and their departments of justice around the world, the most notable of which are the US, Canada, the UK, the EU, Japan, South Korea, and Australia. Each of these countries have their own web pages that publish the details on their specific sanctions. Among the service providers that are distilling this information and pushing it out in a timely way are SIX (formerly known as Telekurs), BigTXN, and Bloomberg.
The thing to remember is that when sanctions are imposed, it is not real-time information, but one still has to act very quickly. There are cases where sanctions have a few days of lead time – a notice period – but in many other cases (as with this OFAC announcement), they are simply imposed, which is why vigilance is so important. Even though the volume of sanctions data is naturally low, the importance of accessing up-to-date, accurate information is crucial.
Ultimately, this means you really should have a near real-time feed of your chosen sanction data providers into your security master or entity master so that you can take it into account along with all the other data that informs your buying and management decisions.
