Management Commitment: Sanctions Compliance Framework Element #1

Posted in Sanctions Compliance on April 9, 2024
Management Commitment

The organization’s senior management commitment to an organization’s risk-based sanctions compliance program which is one of the most important factors in determining compliance. This management’s support is essential in ensuring adequate resources that are fully integrated into the organization’s operations, and also helps legitimize the sanctions program, empower the employees, and foster a culture of compliance, at all levels.

Senior management’s commitment is a critical factor in determining the success of the implementation of the sanctions compliance program, and effective management support includes the availability of adequate resources for the compliance function and support for the compliance team’s authority. Senior Management includes senior leadership, executives, and/or the board of directors. 

Management Commitment

Management Commitment

Management’s efforts generally are measured by the criteria including the ability of personnel to report sanctions-related misconduct by the organization or its personnel to senior management without fear of reprisal, senior management actions that discourage misconduct and prohibited activities, and highlighting the potential repercussions of non-compliance with sanctions. The sanction compliance program should be robust for compliance with sanctions requirements.

Senior management reviews and approves the organization’s sanctions compliance program and it ensures that the compliance function is delegated with sufficient authority and autonomy to deploy compliance policies and procedures, and effective controls. Senior management ensures the existence of direct reporting lines between the compliance function and senior management, including routine and periodic meetings. Senior Management must take, and continue to take, steps to ensure that the organization’s compliance function receives adequate resources including in the form of a strong compliance team, tools and technology, and other required resources, necessary to the organization’s compliance with the sanctions regime.

Senior management sets and promotes a “culture of compliance” and demonstrates recognition of the seriousness of apparent violations of the laws and regulations administered by OFAC, or deficiencies, by the organization and its employees to comply with the compliance program, policies, and procedures, and implement measures to reduce violations. Such measures must address the root causes analysis of past violations or breaches and represent appropriate solutions.

Management Commitment

Final Thoughts

Instances of apparent violations of the laws and regulations overseen by OFAC, as well as malfunctions, deficiencies, or failures on the part of the organization and its employees to adhere to the SCP’s policies and procedures, are taken seriously by senior management, who then takes the necessary steps to lessen their likelihood in the future. Such actions should, whenever possible, constitute systemic remedies and address the underlying causes of earlier apparent infractions.