The Sarbanes-Oxley Act

Q.  How does SOX (Sarbanes-Oxley) relate to government watch lists?

A.  Section 404 of SOX is concerned with financial reporting controls, and discusses the controls required for fraud risk assessment, fraud detection and fraud prevention.

Companies subject to SOX must incorporate anti-fraud measures into their business processes.  Often, these measures include customer and partner validation using government watch lists.

Q.  Which businesses need to pay attention to these lists?

A.  All U.S. persons should review these regulations during the course of implementing SOX controls.

Q.  How much can fines for sanctions violations be?

A.  Fines for violations of various government watch lists can be substantial.  Depending on the program, criminal penalties can include fines ranging from $50,000 to $10,000,000 and imprisonment ranging from 10 to 30 years for willful violations.  Depending on the program, civil penalties range from $11,000 to $1,000,000 for each violation.

As an example, in August of 2007, the government announced that had paid a settlement of $182,750 for a sanction violation.  A number of other companies have been fined over $200,000 in 2007 alone.

Q.  How come I haven't heard of this before?

A.  Government sanctions have existed for many years, but since the terrorist attacks of September 11, 2001 the Federal government has dramatically increased its use of watch lists.  The government considers watch lists like OFAC to be a valuable weapon against terrorist and criminal organizations.

Q.  How can I ensure that my business stays in compliance?

A.  Verifilter continually monitors the relevant government watch lists, collecting them into a single, easy-to-search master list.  Subscribe to our service and you'll get instant access to our search facilities, including web-based checking and easy integration into your own web site.

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