The long arm of the US law
Jinfo Blog

10th March 2008

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The long arm of the (US) law. Barclays Bank has found itself under investigation by the US Department of Justice and the New York district attorney. According to Katherine Griffiths, the Financial Services Editor of the Daily Telegraph on 4th March (http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/04/cnterror104.xml) and as reported in Barclays’ 2007 annual results (http://www.investorrelations.barclays.co.uk/INV/A/Content/Files/2007_Barclays_Results_Announcement_web.pdf) it is being questioned over possible breaches of Office of Foreign Assets Control (OFAC) (http://www.treas.gov/offices/enforcement/ofac/) rules by doing business with states or countries on terrorist blacklists. The US created the OFAC policies in an attempt to prevent companies and individuals from a number of countries, including Cuba, Iran, North Korea and Sudan, using transactions with US companies to finance their activities. Previously only US institutions had to comply with the sanctions; now pressure is being put on European companies to follow suit. The Barclays’ event is of interest to information professionals for a number of reasons. There has been a growth in the number of Know Your Customer (KYC) data sources which attempt to identify with whom you are doing business. However to comply with the various due diligence and compliance processes KYC needs to be embedded into whatever company workflow or filtering processes that govern the trading, underwriting or other customer transaction processes. Within many companies it is considered more natural for our colleagues in IT to step in as they have management responsibility for corporate systems. But the skill of the Information Professional is critical in evaluating exactly what the vendor services offer in terms of country coverage. A number of vendors have developed information products to support this business need, which has been a legal requirement in US companies in the past few years, but which is becoming as critical for those in Europe with US subsidiaries.

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