The Sanctions Screening and Compliance Benefits of a Unified System

The evolving partnership between London Stock Exchange Group (LSEG) and Windward offers multiple sanctions screening and compliance benefits via a unified system. Trading and shipping companies, major energy companies, and other types of organizations can leverage this innovative technology in their pre- and post-fixture processes to minimize sanctions risk via automation and optimized collaboration between tiers 1 and 2.  

Maritime traders and other organizations face dynamic – and growing – regulatory demands as a result of rising deceptive shipping practices and an ever-more-competitive commercial landscape.

Deceptive shipping practices (DSPs) are tactics used by bad actors to evade sanctions and regulations, and to engage in illegal operations such as oil, weapons, and drugs smuggling. These practices can make it difficult to track the movements and origins of cargo.

The ongoing Russia-Ukraine war has led to a slew of increasing sanctions placed on Russia and Russian entities by Western countries. The European Commission passed a 12th package of sanctions in December 2023 and has approved a 13th package to mark the second anniversary of the invasion on February 24, 2024. 

These sanctions are having the intended impact as enforcement has intensified, including an executive order passed by U.S. President Biden targeting financial institutions that have indirectly allowed Russia to continue its war. It is increasingly important for stakeholders involved in global trade to have a holistic view of risk. 

Even inadvertent sanctions violations could expose an organization to severe financial and reputational harm. 

To ensure uninterrupted operations, maritime traders and energy majors must take adequate steps to ensure that vessels are quickly cleared for business. They would be wise to carefully monitor vessel risk and manage any potential business blockers long before negotiations begin.

Windward’s Maritime AI™-powered technology was selected by LSEG in the summer of 2023 to augment its existing shipping analytics capabilities available on the LSEG Workspace platform in real-time. Windward’s risk scores for vessels became available on LSEG’s Eikon platform. Windward’s platform began tracking the approximately +117,000 vessels that were at sea, including oil tankers, dry bulk carriers, and container vessels. 

Using Maritime AI™ and advanced behavioral risk assessments models, the technology screens against criteria that could be an indicator of illicit activity, such as ship-to-ship (STS) operations and AIS manipulation practices like location (GNSS) manipulation, to determine a vessels’ risk profile.

The LSEG-Windward partnership evolved in February 2024. The new agreement introduces the integration of select LSEG’s World-Check services into Windward’s platform, providing users with comprehensive compliance and risk management solutions beyond the maritime domain.

World-Check data will augment Windward’s existing capabilities with more than 1,000 customizable global sanctions lists. The data pool is significantly more structured and robust than any other set tested by Windward. This helps generate top performance and queries that were not previously possible are now being executed in a few seconds!

The large number of sanctions and watchlists means that users will be able to select specific lists easily and reliably. For example, a trader in Geneva will be able to choose the Swiss sanctions lists to ensure compliance with only relevant lists for his/her business.

World-Check highlights companies that are 50% (or more) owned by a sanctioned entity, which is required by regulations. This will be implemented as a new risk building block in Windward’s platform. 

This partnership will streamline and enhance the screening process for onboarding, Know Your Customer (KYC), and third-party risk due diligence, as well as the monitoring process, until a trade deal is concluded. Windward’s customers can stay ahead of emerging sanctions globally with a unified system for sanctions screening and compliance.

“By incorporating World-Check’s data into our platform, we are not only broadening our capabilities, but also reinforcing our dedication to equip our clients with actionable insights for informed decision-making and empowering them to navigate the complexities and intricacies of global trade risk with confidence and ease,” said Ami Daniel, Windward’s Co-Founder and CEO.