Created by American Express Singapore Compliance Office July 2003

1
Created by American Express Singapore Compliance
OfficeJuly 2003
SANCTIONS
2
AGENDA

• Background
• Application of sanctions
• QA

SANCTIONS
3
AGENDA

• Background
• Application of sanctions
• QA

SANCTIONS
4
What Are U.S. Sanctions?

• A series of trade restrictions imposed by the US
  government on
• US nationals
• US companies and their branches
• Non-US companies owned by US companies
• Non-US companies controlled by US companies
• Non-US companies located in US

SANCTIONS
5
List of Sanction Countries

• Cuba
• Iran
• Iraq
• Libya
• Sudan
• North Korea
• Syria
• Afghanistan (The Taliban)
• Yugoslavia (Serbia)

SANCTIONS
6
Basic Compliance Rules

• These sanctions mean that generally ...
• All staffs may not participate in certain
  business and travel transactions involving
  sanction countries or individuals or
  organizations.
• All staffs must follow the rules strictly even
  under pressure from customers to terminate
  relationship with Amex.
• No staff, however senior, has authority to break
  rules or grant exceptions for any client.

SANCTIONS
7
Penalties

• Breaking sanctions rules means ...
• Monetary fines as high as USD10 million for
  corporations and USD250 thousand for individuals
• Civil penalties as high as USD1 million
• Imprisonment up to 30 years
• Disciplinary actions
• Negative publicity
• Damage to Amex and our brand

SANCTIONS
8
Regulatory Background

• U.S. laws
• Trading With The Enemy Act
• Emergency Economic Powers Act
• Anti-terrorism and Effective Death Penalty Act
• Singapore laws
• MAS (Anti-terrorism measures) regulations
  implement the United Nations Security Council
  resolutions on anti-terrorism measures.

SANCTIONS
9
AGENDA

• Background
• Application of sanctions
• QA

SANCTIONS
10
SDN, SDT, SDGT, FTO, SDNTK, Balkan, Taliban and
Zimb

• You cannot carry out any transaction or service
  in which an SDN, SDT, SDGT, FTO, SDNTK, SDNT,
  Balkan, Tabliban, or Zimb is involved.
• Definitions
• SDN Specially Designated Nationals
• SDT Specially Designated Terrorists
• SDGT Specially Designated Global Terrorists
• FTO Foreign Terrorist Organizations
• SDNTK Specially Designated Narcotics
  Trafficker Kingpin
• SDNT Specially Designated Narcotics Trafficker

SANCTIONS
11
Government of Sanction Countries

• You cannot carry out any transaction for a person
  or organisation that is part of, or owned, or
  controlled by governments of all sanction
  countries.
• Above prohibitions are not applicable to
• North Korea
• Syria
• Afghanistan (The Taliban)
• Yugoslavia (Serbia)

Restriction only on donation from government /
transaction supporting terrorism
Restriction only on transaction associated with
former Taliban / Balkan
SANCTIONS
12
Nationals of Sanction Countries

• You can carry out a transaction or service for
  nationals of sanction countries ONLY if the
  nationals are outside the sanction countries at
  time transactions occur or services are provided.
  
• Above prohibitions are not applicable to
• North Korea
• Syria
• Afghanistan
• Yugoslavia
• Iraq

You cannot carry out any transaction or service
for Cuban national (regardless of where the
individual is resident) or member of an
organization based in Cuba.
SANCTIONS
13
Part 1 - Card Application
New Accounts received a card application but
noticed that the billing address is in Iran. Upon
investigation, Amy found out that the card
applicant, Luta, is a Singaporean who will be
posted to Iran for the next 1 year due to his job
requirement. The primary reason he applied for
the card is to give his wife a supplementary card
for use in Singapore. He provided an Iranian
address so that he can receive his statement in
Iran and pay for the card charges.
SANCTIONS
14
Part 2 - Card Payment Arrangement
Amy checked and verified that Luta is not a
sanctioned individual. However, she knew that
Iran is a sanction country and to ensure Amex has
no dealings with any sanction country, Amy asked
Luta whether he would mind if the card statements
were sent to his wife in Singapore. Luta agreed
and provided Amy with his Singapore residential
address. However, he told Amy that since his wife
is not working, the card charges will be settled
via fund transfer from his account with Iran
National Bank, the like of Singapore POSB.
SANCTIONS
15
Part 3 - Card Replacement
A few months later, while Luta is on a business
trip to Afghanistan, he was robbed and lost his
wallet. He called Amex, explained the purpose of
his call for a card replacement. TSC staff,
Janet, expressed sympathy and promised that his
replacement card will be sent to his hotel in
Afghanistan in a weeks time. Luta told Janet
that he will be leaving for Iran after 3 days and
requested the replacement card be sent to his
Iranian residential address instead. Janet took
down the address and proceed with the standard
card replacement procedures.
SANCTIONS
16
Card Application / Cancellation

• You cannot (1) approve new card application with
  billing address in sanction countries
  cardmembers must be cancelled, (2) solicit
  cardmember for alternate billing address.
• Above prohibitions are not applicable to
• North Korea
• Syria
• Afghanistan
• Yugoslavia
• Iraq

For Cuban resident or national residing anywhere
in the world, you cannot (1) approve a new card
application cardmembers must be cancelled, (2)
solicit billing address outside Cuba.
SANCTIONS
17
Card Payment

• You cannot accept (1) sanctioned currency, (2)
  fund transfer from banks in sanction countries or
  their government-owned/controlled banks.
• Above prohibitions are not applicable to
• North Korea
• Syria
• Afghanistan
• Yugoslavia

SANCTIONS
18
Card Replacement

• You cannot perform card replacement to sanction
  countries.
• Above prohibitions are not applicable to
• North Korea
• Syria
• Afghanistan
• Yugoslavia
• Iraq

SANCTIONS
19
AGENDA

• Background
• Application of sanctions
• QA

SANCTIONS