The Role of Forensics in Sanctions Investigations
The global value chain is a far-reaching system reliant on cross-border transfers of funds, services and goods, which are increasingly subject to economic sanctions law enforcement by the Office of Foreign Assets Control (OFAC), the US Department of Justice and other regulatory authorities. Investigations involving sanctions allegations will continue to be more prevalent as sanctions are a growing foreign and security policy tool used to influence foreign behavior and mitigate national security risks.
Parties seeking to circumvent the sanctions regulations often go to great lengths to disguise transactions using intricate payment processes, subsidiaries, intermediaries and shell corporations, among other vehicles. To combat these types of deception, organizations should implement effective sanctions compliance programs and investigate potential sanctions violations. Thus, prudent companies will leverage cutting-edge investigative techniques, tools and consultants with specialized forensic knowledge.
The purpose of this chapter is to explain key investigative procedures and best practices from a forensic accounting perspective and highlight the techniques and tools used to uncover facts and patterns in the complex web of transactions designed to circumvent economic sanctions. The chapter provides a combination of best practices, published guidance from OFAC and recent case outcomes to provide insight on the evolving sanctions environment and to support forensic and compliance professionals in creating a sanctions compliance program (SCP) or enhancing or testing an existing one.