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Treasury talks transparent transactions.

Summary: Transparency is one of those buzzwords that gets thrown around alot in today’s business world. But just because a term is overused does not suggest ...

Transparency is one of those buzzwords that gets thrown around alot in today's business world. But just because a term is overused does not suggest it loses its meaning. Transparency in business is rightly becoming the new norm, as stakeholders are demanding to know what exactly is happening with their money.

Sometimes, though, businesses need a reminder to be transparent, and sometimes that reminder has to come from someone with authority. That must have been on the mind of Adam Szubin, director of the U.S. Treasury Department Office of Foreign Asset Control (OFAC) when he spoke at a conference in Boston on Sept 30.



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Szubin stated that "transparency is the fundamental starting point of any meaningful compliance program." That's a pretty clear message to the banking world.

He gave some specific examples of transactions that are too often opaque, such as so-called omnibus accounts, which combine various securities transactions. Insurance and shipping were other areas that he pointed to as needing more transparency.

In the years since the financial crisis, compliance matters have become more and more complex in the banking world -- banks would likely say their compliance obligations have become arduous -- and Szubin acknowledged this in his remarks, stating that banks have made serious efforts to comply and that most have done impressive work in this area.

He also noted that good faith efforts to comply with government regulations would be taken into consideration when planning enforcement priorities, noting that willful recklessness will land a company on the regulatory radar faster.

"We are very careful and very thoughtful befopre going out with any sanctions cases," Szubin said. "There's no capriciousness and we're not aggressive for the sake of it," he said.

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Publication:Inside Counsel
Date:Oct 1, 2014
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