Focus Day | Wednesday 25 May 2011
Impact of the EU and US Sanctions Regimes on the Insurance and Reinsurance Industries Upon the enactment of EU Regulation 961/2010, sanctions compliance concerns within the insurance and reinsurance industries were magnifi ed by the specifi c targeting of insurance activities within the regulation’s prohibitions. Insurance and reinsurance professionals need to have a firm grasp of the direct and indirect risks associated with providing global insurance and reinsurance cover for different lines of insurance.
Join our panel of insurance and reinsurance specialists to learn the best techniques for implementing and monitoring compliance programmes and screening systems specific to insurance and reinsurance practices. Engage in in-depth discussions with the leaders in the industry as they examine fact scenarios to determine how underwriters can best determine sanctions risks when writing new business or during renewal periods.
9:00 Registration and Coffee
9:15 Chair’s Opening Remarks
Markus E. Schulz
Chief Compliance Officer
Global Life & Group Financial Crime Officer
Zurich Insurance Company Ltd (Switzerland)
9:30 EU & US Sanctions Regime Overview and their Impact on Insurance and Reinsurance
Dr. Quirin Emmerich
Global Head of Legal & Compliance
Allianz Global Corporate & Specialty AG (Germany)
Gary Parkin
Chief Financial Crime & Regional Sanctions Offi cer, Europe
Chartis Insurance UK Limited (UK)
Stefan Heinisch
Senior Legal Counsel, Group Legal Services – Compliance
Hannover Re (Germany)
Andrew Wragg
Senior Manager, International Regulatory Risks
International Regulatory Affairs
Lloyd’s (UK)
- What are the provisions or restrictions under the EU and US sanctions regimes specifi c to the insurance and reinsurance industries?
- What business is the insurance and reinsurance industry still permitted to insure under the regimes?
- Guidelines for insurers to proactively create and implement systems or training packages to cope with sanctions regimes?
- How to determine what is an “Iranian Controlled Entity” in the context of providing insurance and reinsurance
- Determining when insurance services may be provided to “Iranian Controlled Entities” directly or “indirectly”?
- How do insurance and reinsurance services fi t into the description of “fi nancial services” under the EU regulations?
- How the EU Regulation 961/2010 has affected insurance coverage for shipping or transport companies. Under what circumstances may shipments to Iran be insured and reinsured under the regime?
- What do the insurers and reinsurers need to do to assist in avoiding shipment and transhipment diversion risks?
11:00 Morning Refreshments
11:15 Implementing and Maintaining Screening and Compliance Programme Requirements and Thorough Due Diligence Practices Concerning PEPs and ECOs (Part 1)
Markus E. Schulz
Chief Compliance Officer
Global Life & Group Financial Crime Officer
Zurich Insurance Company Ltd (Switzerland)
- Screening existing books of business against the new EU sanctions regulations
- Best practices to discover the identities of your clients and their clients: what and where are the red fl ags in regards to sanctions compliance?
- Monitoring customers’ trade relationships with non-sanctioned countries i.e. Oman and Saudi Arabia to screen their affi liates, subsidiaries and customers for Iranian links
- Complying with sanctions when conducting business with sanctioned countries
- US insurance subsidiaries operating outside the US vs. European Insurance companies
- Best practices for sanctions compliance and screening when taking on new business by way of pool bookings
- Identifying which insureds may be designated persons or originate from sanctioned countries?
- Controlling third party sanctions compliance by monitoring brokers’ business practices
- obtaining accurate information from the broker in regards to a client and their business, the client’s major shareholders, directors, subsidiaries and benefi ciaries
- identifying clients’ customers’ ownership structures and any links to SDNs
- Reinsurers’ best screening practices for monitoring EU sanctions compliance by non-EU insurance companies when reinsuring risks granted by such companies
12:15 Networking Lunch
1:30 Implementing and Maintaining Screening and Compliance Programme Requirements and Thorough Due Diligence Practices Concerning PEPs and ECOs (Part 2)
Joel Lange
Solution Manager
Accuity (UK)
Markus E. Schulz
Chief Compliance Officer
Global Life & Group Financial Crime Officer
Zurich Insurance Company Ltd (Switzerland)
- Tailoring screening programmes to address specific insurance and reinsurance sanctions risks across all lines of business
- What screening options are available for reinsurers – who can they screen? What information can be obtained and from whom?
- Screening software systems available in the market to meet insurance and reinsurance specifications
- identifying the specific needs for insurers vs reinsurers when tailoring or purchasing screening systems
- Effectively integrating and implementing a screening programme into insurance/reinsurance business practices?
- fitting screening software to different lines of insurance
- identifying PEP and ECO red flags
- What automated systems are available for insurance and reinsurance business and what screening practices should remain un-automated?
- identifying which digital lists are appropriate for use by insurers and reinsurers to screen against
- Where does the onus lie for obtaining the appropriate export licences and if there is potential insurance liability, how can it be mitigated?
- How to ensure clients remain within the confines of export and financial transaction licence terms and conditions
- Practical advice in overcoming challenges in monitoring the operations of insured cargo fleets i.e. ships used, cargo carried, routes taken and ports docked at
2:45 Practical Advice for Revising Underwriting Practices to Accommodate International Sanctions Risks
Dr. Quirin Emmerich
Global Head of Legal & Compliance
Allianz Global Corporate & Specialty AG (Germany)
Louise Forbes
Regulatory Compliance Director
Willis (UK)
- Successfully integrating sanctions risk checks into the underwriting assessment practices
- Assessing when insurance contracts fall within or outside the regulations
- new business
- renewals
- How to draft new comprehensive insurance and reinsurance exclusion clauses to prevent sanctions violations and/or limit liability
- Assessing the effectiveness of existing insurance exclusion clauses
- Adapting reinsurance disclaimers to cover sanctions risks in response to Article 12 of EU Regulation 961/2010 and analysing the effectiveness of disclaimers under existing contracts
- Effectiveness of existing warranties for sanctions compliance with new EU regulations
- What should be included in a due diligence process when assessing risk for Financial Institutions Insurance in response to licensing requirements for fi nancial services to Iran?
- Best underwriting practices for insurers and reinsurers when writing cargo insurance business
- Monitoring where insured cargo is headed
- where have products and materials come from? challenges when cargo includes US origin materials
- determining whether shipments are carrying dual use items, where they are going to and who are the parties to the shipments contracts
- Reasons to take the currency of the contract into account when determining what sanction regimes to apply to
- Case scenarios and fact situations involving practical advice on creating accurate underwriting practices for sanctions compliance when writing business for financial institutions insurance, marine insurance, aviation insurance, cargo or freight insurance, D & O liability insurance etc
4:15 Chairs’ Closing Remarks
4:30 End of Pre-Conference Focus Day
Main Conference – Day 1 | Thursday 26 May 2011
8:45 Registration and Coffee
9:00 Opening Remarks from the Co-Chairs
Tassilo W. Amtage
Head of Foreign Trade & Sanctions
Commerzbank AG (Germany)
Markus E. Schulz
Chief Compliance Officer
Global Life & Group Financial Crime Officer
Zurich Insurance Company Ltd (Switzerland)
9:15 Implementation and Enforcement Priorities of the EU & UN Sanctions Regimes Across Europe
Stephane Chardon
Administrator for Sanctions and Kimberley Process
European Commission (Belgium)
Roland E. Vock
Head, Sanctions Unit
State Secretariat for Economic Affairs SECO
Federal Department of Economic Affairs (Switzerland)
- Update on the European Union’s policy priorities for its sanctions regime for 2011 and beyond
- Implementation of European Sanctions including EU Regulation 961/2010 across European countries
- Scope and applicability of EU Regulation 961/2010 restrictions on energy sector investment in Iran
- EU Member State enforcement priorities and expectations for the standard of care required from cargo carriers in complying with specific oil & gas restrictions
- Examining the disparities in interpreting EU Regulation 961/2010 by the EU member states
- what is considered ‘ownership’ or ‘control’ under Article 16 of the regulations?
- what does the “provision of funds” or “making funds available” mean?
- restrictions on trading with entities in which a listed entity or restricted party has an interest
- The key priorities for enforcement of EU and UN sanctions regimes in Europe
- actions taken against entities and individuals (PEPs)
- enforcement against EU citizens residing in non-EU countries
- Sanctions regulation and implementation issues in Switzerland
- European national regulators’ expectations and guidelines for compliance following the FSA’s fi ne against Royal Bank of Scotland for sanctions systems and controls deficiencies
- Latest developments in sanctions regimes against Myanmar (Burma), Syria, Libya etc
- Exceptions and exemptions to the EU Regulation 961/2010
- Article 21 exemption for exporting dual use goods such as foodstuffs, medical equipment and humanitarian goods
- how broadly do you defi ne “foodstuffs” etc?
- Article 10 exemption regarding contracts fi nalised before the regulation came into force
10:30 Morning Refreshments
11:00 The Comprehensive Iran Sanctions, Accountability and Divestment Act (CISADA): Heightened Extraterritoriality and its Impact on EU Business
Andrea Gacki
Assistant Director for Licensing, Office of Foreign Assets Control
US Department of Treasury
Edward Rubinoff
Partner
Akin Gump Strauss Hauer & Feld LLP (USA)
- In this session the speakers will provide factual situations for US extraterritorial reach and enforcement against non-US entities
- Scope and application of Comprehensive Iran Sanctions, Accountability and Divestment Act (CISADA) on European business and US business and affi liates operating outside the US
- scope of CISADA restrictions on the provision of support to Iranian oil and gas industries
- enforcement priorities targeting transport and shipping of refined oil products and refi ning equipment/materials to Iran
- Applicability of licensing requirements to non-US entities
- expected waiting periods for license approval
- Lessons learned from recent US investigations and fines against Financial Institutions in “stripping” cases
- Factors OFAC considers in pursuing enforcement actions against non-US entities and when assessing and calculating penalties
- range of penalties levied under CISADA
- Establishing a violation on the basis of what a company “should have known” rather than actual knowledge
- What is the level of cooperation and communication between the US and respective European authorities when enforcing US sanctions?
- Circumstances in which a company will be investigated for performing previously legitimate business with Iran and the potential utilisation of the “Special Rule” under CISADA
12:15 Networking Lunch Sponsored by:
1:30 Effectively Working with Licensing Agencies Across EU Member States
Robin Newnham
Head of Licensing, Asset Freezing Unit
HM Treasury (UK)
Cristina Collura
Director of International Unit
Department of Treasury, Financial Crime Prevention Directorate
Ministry of Economy & Finance (Italy)
- What financial transactions require notifi cation or authorisation?
- Level of due diligence expected of fi nancial institutions to detect payments to or from an Iranian person/entity above €40,000
- Scope and applicability of the defence under Article 32 of EU regulation 961/2010 of a lack of knowledge or “reasonable cause” to suspect infringement of sanctions provisions
- Notification requirements under Article 21 of EU regulation 961 across European countries
- Respective licensing requirements under EU Regulation 961/2010 in European countries
- what are the notable differences between each country?
- how long will it typically take to get a license?
- specific requirements for export licences to Iran Syria, Sudan, Myanmar (Burma), Cuba and Libya
- Divergence in interpretation in EU member states of product and service descriptions in the annexures to EU regulation 961/2010
- Specific licensing requirements for pharmaceutical products and technology transfers?
- What is the definition of an “Iranian Person” and what is an “Iranian Controlled Entity”?
- can an “Iranian Controlled Entity” be an “Iranian Person” for the purposes of the EU licensing requirements
- Applicability of Iranian funds transfer requirements under EU regulation 2010/961 to domestic transactions within EU member states
2:45 Comparing and Contrasting the US and EU Sanctions Regimes: How Will the Differences and Conflicts Affect your Operations?
Jasper Helder
Partner
Baker & McKenzie LLP (The Netherlands)
- Key differences and similarities between the US and EU sanctions regimes
- Identifying the areas of business the most at risk due to differences between the regimes
- Factors to consider in establishing and maintaining a compliance programme that meets confl icting US and EU sanctions requirements
- Comparative enforcement procedures against Financial Institutions under US and European sanctions regimes
- How blocking provisions in EU regulations prohibit compliance or disclosure of non-compliance with US sanctions regulations
- How much and what kind of information can you hand over to a foreign regulator without breaching data protection and privacy laws and the EU and US blocking regulations?
4:00 Implementing Effective Exit Strategies from Sanctioned Countries to Minimise Sanctions Violations and Contractual Penalties
Carol Fuchs
Counsel for International Trade Regulation
GE (USA)
Martial Smets
Chief Compliance Officer
GE Capital Global Banking (Czech Republic)
- Key considerations in making the decision to exit from relationships with sanctioned countries
- Identifying and minimising the risks (e.g. facilitation) of involving US persons or entities in planning and implementing an exit strategy
- Understanding the difficulties of reversing an exit policy
- Distinguishing among different sanctioned countries
- Minimising risk of litigation: What you should or should not do
- Challenges European vs. US entities face in the exit process
- Assessing the safety and effectiveness of an exit strategy before implementation
- Considering employment law factors when planning an exit strategy
- Minimising the negative impact of an exit strategy on contractual finance arrangements when terminating a contract with a sanctioned country or entity
- Scope and applicability of the ‘grandparenting’ clause exemption under Article 10 of the EU regulations 961/2010
- Effectively exiting a contract with an Iranian entity when falling within the exemption under Article 10 i.e. without a force majeure
- Filing a voluntary disclosure upon discovering possible sanctions violations while carrying out an exit strategy
- mitigation in the context of an overall exit policy
5:15 Conference Adjourns
Main Conference – Day 2
8:30 Coffee
9:00 Opening Remarks from the Co-Chairs
Jay Seymour *
Senior Attorney
BP America Inc (USA)
J. Daniel Chapman *
Chief Compliance Officer
Parker Drilling Company (USA)
9:15 Third Party Service Providers Relationships: Controlling Shipments and Trans-shipments to Avoid Diversion Risks
Wolter Boerman
B.I. Consultancy and Training, Former VP Export Controls,
Phillips International BV (The Netherlands)
Dr Anne-Marie Wolfsohn
Head of International Legal Department (EuMEA, Asia-Pac)
Rockwell Collins (France)
- Effectively structuring contracts with third parties to avoid sanctions violations and diversion risks
- What controls you should have on your transportation service providers and the entire supply chain to ensure that the shipments reach the right end-users
- Training major contractors including logistics, transporters, distributors and agents on diversion risks and communicating company policy and key instructions
- Identifying the risks in transporting cargo through sanctioned countries as a link in the supply chain
- Reclassification risks upon cargo crossing sanctioned country borders
- can US persons deal with the cargo or are they now tainted?
- Implications of shipping products between EU countries and sanctioned countries in circumstances involving the US
- Identifying specific “Destinations of Diversion Concern” when contracting with third parties and addressing critical transshipment and diversion warning signs at inception to avoid sanctions violations
- Assessing potential violations of US trans-shipment rules during and after shipment
- what to do when you discover violations
- How do you treat knowledge of red flags of likely diversion to unlawful destinations, end-users or end-use?
- Retaining records and knowing what information to collect from third parties
- Lessons learned from recent fi nes levied against shipping lines
- duty of care required by shipping companies?
- Appropriate US or EU entity responses upon trade partners becoming SDN’s or restricted parties under US sanctions regulations
- US persons’ involvement in EU entities which continue to deal with SDN’s
10:30 Morning Refreshments
11:00 Tailoring Effective Screening Programmes to Detect and Proactively Prevent Business-Specific Sanctions Risks
Tassilo Amtage
Head of Foreign Trade & Sanctions
Commerzbank AG (Germany)
Adela Deaconu
Head of Corporate Export Controls
Phillips International BV (The Netherlands)
- Establishing and maintaining effective screening programmes by understanding business models and operations
- Benefits of implementing a single company-wide IT system to facilitate screening
- Determining the best screening systems to mitigate risk for different industries
- Creating export control classifi cations to identify licensing requirements
- Generating customs data relating to both commodity codes and country of origin to highlight product restrictions
- How to establish screening programmes to allow offl ine screening
- Screening products, transactions, customers, end-users, end-uses, intermediaries and suppliers
- determining ownership structures or customer companies
- When to complete compliance screening – At order entry? At shipment?
- Pros and cons of using automated systems
- Vetting screening service providers and comparing disclaimer policies
- Integrating automated screening software into business practices to minimise screening times and maximise business efficiency
- How to monitor quality and completeness of third party lists and databases used to conduct sanctions checks—which are the best and where can you fi nd them?
- Where does liability rest for accuracy of lists and data used for screening i.e. monitoring Dual Use and Denied Parties Lists?
- managing risks of relying on EC digital lists with disclaimers
12:15 Networking Lunch
1:30 Implementing and Monitoring Compliance Programmes that Reduce Your Organisation’s Risks
Jay Seymour *
Senior Attorney
BP America Inc (USA)
Shanna O’Brien
VP Trade Management
Eaton Corporation (USA)
- Reducing sanctions risks by understanding business operations and tailoring your compliance programme to your business model
- The pros and cons of designing parallel compliance programmes to deal with different companies, jurisdictions or transactions
- Weighing the benefits or risks of establishing a single compliance programme to suit all business areas and activities
- Tailoring a programme to your industry’s unique risk profile: key considerations for banks, insurers, manufacturers and exporters
- How often a programme should be audited for weaknesses
- remedying your programme after a sanctions violation has been discovered internally or investigated by a competent authority
- Training staff and communicating sanctions compliance policies to ensure consistent compliance programme implementation across an organisation including management and operations
- Pros and cons of involving external consultants to assist with compliance programme implementation and maintenance
- How to continually update your compliance programme to record amendments or reforms to international sanctions regulations
2:30 Conducting Pre-Transactional Due Diligence and Managing Post-Transactional Sanctions Risks in M&As, JV Partnerships and Strategic Alliances
Stephan Müller
Partner
Oppenhoff & Partner (Germany)
- Performing due diligence to accurately assess the compliance environment and any export or sanctions compliance risks
- unexpected sanctions risks arising from inter-EU or EU M&A or Joint Ventures
- Designing due diligence programmes tailored to the target and based on the business being acquired or merged
- Avoiding liability under successor liability principles: what an acquirer or fi nancier should be wary of in a target’s sanctions compliance programme
- Best practices for completing an M&A of a non-US company performing legal business with countries subject to US licensing requirements
- Assessing due diligence requirements for completing standard business transactions with business partners, distributors, wholesalers, agents etc
- Structuring and drafting contracts with non-EU countries to ensure the contracted activity is compliant with EU sanctions
- Scope and application of EU regulation provisions against joint ventures in the oil and gas sector
- circumstances of indirect applicability for joint ventures in different industries
- Comparable risks for persons/entities in controlling and noncontrolling positions
- Scope for potential sanctions violations by non-controlled joint ventures outside the oil and gas industry
- extent and position of potential liability
- Targeting due diligence investigation on those parts of a joint venture business more at risk of sanctions violations
- Completing integration processes post merger while maintaining or implementing standards of sanctions compliance
3:45 Afternoon Refreshments
4:00 Avoiding the Risks of Facilitating Sanctioned Transactions and Other Indirect Sanctions Risks
Wolter Boerman
B.I. Consultancy and Training
Former VP Export Controls, Phillips International BV (The Netherlands)
David Lorello
Partner
Steptoe & Johnson LLP (UK)
- Scope and application of the US ‘facilitation’ prohibition in Europe
- Is there an anti-facilitation rule under the EU-Iran sanctions?
- Impact of the facilitation prohibition on trade and financing transactions outside the USA
- What does “indirectly” mean in the context of facilitation
- Identifying circumstances in which US employees may knowingly or unknowingly violate the US facilitation prohibition rule when working at foreign companies, or branches or subsidiaries of US companies
- Structuring managerial reporting for a multi-national business continuing business with a country subject to US sanctions
- Adapting a compliance programme to avoid violation of the US facilitation prohibition
- Impact of the facilitation prohibition on third party services and on your IT
5:00 Chairs’ Closing Remarks
5:15 Conference Ends
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