Economic sanctions Law Case Study Research Coursework

1. What legal/compliance issues do you think are relevant to this product launch?
2. What risks does the bank have in undertaking this project
3. What departments or lines of business should be on the project team?

Part III. C. of OFAC's Economic Sanctions Enforcement Guidelines

Actions  (p. 57603) deals with Harm to Sanctions Program Objectives. 

1. Why is this part of the Enforcement Guidelines? 
2. What does it tell us about the special nature of economic sanctions regimes? 
3. What potential compliance issues does it raise? 

Borges, Inc., a Delaware company, owns copper mines around the world.  Between 2007 and 2019, the company engaged in systematic violations of the Foreign Corrupt Practices Act, the Sarbanes-Oxley Act, and numerous environmental and mine safety laws both in the United States and abroad.  In June 2019, a whistleblower from the mining department contacted the New York Times, which published a story exposing the environmental and mine safety violations. The board of directors of Borges, Inc. has just hired you as an outside consultant to help them navigate through this mess.  They admire the way that Siemens ultimately handled its compliance failures problems (see the readings for this Module).  Please answer the following questions, making reference, of course, to what you learned about Siemens: 

1. What should the Borges, Inc. do vis-à-vis the violations that have not yet come to light? 
2. What should it do to help preserve its reputation? 
3. What should it do in order to minimize its exposure to criminal and civil sanctions?

10.  Hospitals, Inc. owns 105 hospitals in the U.S. and 15 hospitals abroad, including acute care hospitals, addiction/substance abuse treatment hospitals, psychiatric hospitals, and teaching hospitals.  Since its inception, the company has let each hospital adopt its own risk management and compliance policies and procedures.  However, as it has continued to grow, the company is having second thoughts about this decentralized approach.  You have just been hired as Hospitals, Inc.’s Chief Risk Officer and Head of Compliance, after spending 25 years in risk management and compliance at several large financial institutions.  You have been tasked with revamping Hospitals, Inc. risk management/compliance policies and procedures.  Based on your reading of the Fed’s “Compliance Risk Management Programs and Oversight at Large Banking Organizations with Complex Compliance Profiles” SR/CA letter, describe two recommendations that you would make to Hospitals, Inc. board of directors, and your justifications.

11.  What is the difference between traditional military warfare and economic warfare?  

12.  What is the difference between an embargo and economic sanctions?

13.  “Another challenge for integrating economic tools into broader security strategies is the coordination of various policymakers with authority in this domain. A number of different actors may be involved in sanctions implementation and enforcement in state and federal agencies, in the executive and legislative branches of government, and in both the United States and abroad. The more these various officials coordinate their CEMs [Coercive Economic Measures] development and enforcement strategies, the more effective the measures can be.” Goldman & Rosenberg Actions pp. 10-11. 

How does this quote help you understand some of the legal risks faced by financial institution and by business firms engaged in international trade?  Please discuss.

14.  You have learned about the Risk Management frameworks defined by the OCC and FRB as well as the FRBs proposed guidance for Management. You have also now learned about the very specific requirements for Compliance Risk Management. You have been asked to join the board at Wells Fargo. In this role you are accountable for overseeing the firm’s remediation of the various enforcement actions, including reviewing and ensuring the corrective actions are appropriate and being implemented effectively. As you prepare for your first board meeting, describe in your own words at least five actions you will be looking to see included in the action plans submitted by Wells Fargo to the regulators. It will help to refer to readings from Module 2 in terms of expectations of what controls and oversight should be in place at a Financial Institution.