Companies & Financial Institutions Contracting with California and Florida Face Additional Compliance Burdens
August 3, 2011, Wilmington, Del. – Following the recent enactment of legislation in California and Florida prohibiting contracting companies from engaging in business with Iran’s energy sector, Regulatory Data Corp, Inc. (RDC), a leading global provider of decision-ready intelligence and risk and compliance protection services, is advising financial institutions and corporations that their state contracts may be at risk if they are not in compliance with these new laws. RDC’s Iran Connect product, the first solution to market last year specifically focused on CISADA compliance, is the industry’s leading solution for corporations and financial institutions impacted by these regulations.
“Companies have to know who they are doing business with, and that is becoming more and more complicated,” said Thomas Obermaier, Chief Executive Officer of RDC. “With nearly a dozen states already adopting legislation divesting public pension investments from firms tied to Iran and 20 more considering similar action, companies and financial institutions have an imminent need to stay abreast of and comply with these mounting requirements.”
Although U.S. authorities have for many years identified and sanctioned Iranian front-companies, these new state laws significantly expand the due diligence obligation for their contractors. At present, the U.S. Treasury Department has named 60 Iranian Revolutionary Guard Corps (IRGC) affiliates and Iran-linked financial institutions, but in reality each of these entities may in turn have thousands of financial or business relationships. The new California and Florida laws now impose a potentially overwhelming compliance burden. Without expert assistance, untangling the intricate web of these Iranian relationships can require time-consuming, in-depth, and often costly manual research.
“Since the enactment of global, federal, and now state sanctions targeting the sale of products, services, and technology that would enhance Iran’s petroleum sector, the stakes continue to rise. Ignorance could prove to be an extremely costly mistake,” added Obermaier.
The U.S. Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (“CISADA”), expanded global Iranian restrictions and significantly increased compliance burdens on global financial institutions and corporations. The Act broadened the extraterritorial reach of previous sanctions and imposed a stringent requirement to monitor and confirm that correspondent banking clients are not engaging with entities doing business with the IRGC or entities facilitating that country’s illicit nuclear program or support for terrorism. CISADA also authorizes state and local governments to divest their funds from parties involved in Iran’s energy sector and to bar these parties from state and local government contracts.
Staffed by researchers with deep knowledge of Iranian affairs and supervised by a team of experienced regulatory and law enforcement experts, last year RDC’s Iran Desk launched Iran Connect to serve as the industry standard for assisting financial institutions and companies in meeting their CISADA compliance obligations.
RDC’s Iran Connect goes well beyond international sanctions lists and major news headlines to comprehensively identify the names and associations of organizations and individuals with publicly known connections to the Iranian energy, transportation, and military sectors. RDC’s Iran Connect compliance product supplements a firm’s interdiction and monitoring activities by providing an easily searched, comprehensive, continuously updated public source data set on Iranian business relationships with in-depth profiles of organizations and individuals with ties to Iranian entities .
About RDC
Regulatory DataCorp Inc., also known as RDC, delivers powerful, decision-ready intelligence and world-class risk and compliance protection, allowing global organizations to identify banned/suspect entities, strengthen fraud protection, ensure regulatory compliance, manage supply and distribution risk, and protect their brand equity. With the world’s largest open source risk-relevant database, RDC provides AML/KYC compliance; Politically Exposed Persons (PEP) protection; emerging market intelligence; corruption, fraud and crime protection; vendor screening and monitoring; and credit risk monitoring to a wide range of clients worldwide. Founded by 20 of the world’s leading financial institutions, today RDC is also a Bain Capital and Goldman Sachs portfolio company. For more information, call 888-533-1181 or visit www.rdc.com
