European Union and UK sanctions also apply to companies and organizations that are majority-owned or controlled by a sanctioned party. US guidelines apply if one or more sanctioned parties hold a 50% or higher share of ownership.
Specifically, this means that business with companies that are not directly sanctioned may be prohibited if they are owned or controlled by sanctioned parties. This is referred to as bans on indirect provisions – as distinguished from bans on direct provisions, which restrict business with directly sanctioned parties and where direct sanctions list screening is possible.
The difficulty in observing bans on indirect provisions lies, among other things, in the fact that authorities do not provide official lists that enable straightforward screening. To find out about the ownership structures of companies and organizations, businesses without automation often conduct manual research in commercial registers. This is a very time-consuming compliance process with a high error rate.
The AEB software Compliance Screening with SCO content from Dow Jones helps companies meet the challenges around bans on indirect provisions – fast and automated – without spending unnecessary resources on trade compliance.
Politically exposed persons, or short PEP, are typically individuals who hold public office or have held such office within a certain time frame in the past. This includes, for example, heads of state and government, ministers, members of parliament, leaders of supreme courts and state agencies, ambassadors, and heads of state-owned companies – as well as people in the immediate circle of such individuals, including life partners, children, parents, and siblings.
Due to the scope of their offices, politically exposed persons are exposed to a greater risk of becoming involved in criminal activities – for example, bribery, money laundering, and corruption. Business activities with such PEP, nationally or internationally, are therefore also subject to an increased risk.
As with bans on indirect provisions, government bodies do not publish official lists that allow for direct screening in the area of PEP. This is where the PEP list from leading content provider Dow Jones comes into play – available in the AEB software Compliance Screening in the Dow Jones content packages Watchlist and Trifecta. Fully integrated and automated, PEP list screening of your business partners is thus easily possible.
In this context, persons of special interest, or short SIP, describe individuals who pose an increased risk to business partners due to a criminal history. As with politically exposed persons (PEP), there are no lists available from official government bodies in the area of SIP that allow for direct screening.
Using licensed Factiva publications, Dow Jones research specialists conduct research on persons of special interest (SIP) to help companies mitigate risk to their business activities in this area. This research specifically relates to individuals who have been formally accused, arrested, or found guilty of serious crimes in the following six categories:
- Corruption
- Financial crime
- Trafficking
- Organized crime
- Terror
- Tax crime
Dow Jones’ research specialists monitor and compile information on SIP individuals that fall into these categories. This SIP data from Dow Jones includes short profiles with an overview of the respective case as well as the content details of the Factiva articles used. Companies that want to automate comprehensive risk management including SIP checks can do so conveniently with the AEB software Compliance Screening software and the Dow Jones content package Watchlist.
In this context, the term “Adverse media entities” describes companies that have received negative media coverage – for example, in the areas of compliance, competition, finance, environment, production, social affairs, and labor law. Different sources are used for such coverage, including newspapers, TV stations, social media, online forums, and many more.
The monitoring of negative coverage on business partners is used to identify warning signals and compliance risks at an early stage and, if necessary, to be able to initiate necessary measures in good time to protect one's own company from reputational damage and further consequences.
With the comprehensive content from the Dow Jones package Trifecta, checking business partners against lists of adverse media entities is also possible – fully automated and integrated in the AEB software Compliance Screening.
The term "state-owned companies" includes companies that are partially or wholly owned or controlled by state governments. They are usually established by governments to carry out commercial activities and are licensed for certain activities. Such companies are subject to increased risks due to their close association with politically exposed persons (PEP) and because they can be found in high-risk industry sectors (e.g., raw material extraction) and politically unstable regions.
Business activities with such organizations increase trade compliance risks for companies – especially in the areas of bribery and corruption.
Dow Jones' dedicated list for "State-Owned Companies" includes aggregated state ownership, state voting controls, and state control of boards of directors. Automated checks are conveniently possible with the AEB software Compliance Screening and the Dow Jones content package Trifecta, to help companies comply with global anti-bribery and anti-corruption regulations.
