Some OFAC SDNs have relatively little information published about them, but for many, most in fact, we know what country they operate out of, for some we even have a building address.
So let’s have a look where they all are and how this is changing over time…
The South American countries targeted by the War on Drugs continue to dominate the picture overall, but Iran now takes top spot after a resurgence following the USA pulling out of the JCPOA. Russia (Ukraine) and North Korea at the expense of Western European countries and Sudan which has dropped of the radar following relaxation of sanctions by the USA. China has crept into the top ten for the last 2 years.
By the way, the biggest population country not to have any SDN presence is … Nepal, the smallest population country to have an SDN presence is … British Virgin Islands.
This isn’t the whole picture, some countries are bigger than others, and you would expect a country with a high population to have more SDNs, so how about if we re-plot but with the number of SDNs (both individual and entity) per head of population …
The picture is dominated by small countries that have shell companies listed by OFAC. Some of these countries have put more controls in place, and the listing by OFAC are old but still current, but this does demonstrate how much risk there is in performing business with small countries. Risk issues like this should be addressed by a country risk index – see our article on Understanding Country Risk.
So how does this compare with the EU List you might ask:
Of course this is all very interesting, but how do we put it to practical purpose? Geographical Risk is a major factor in KYC processes, and in determining matching strategies. Knowing where SDNs are most likely to be found is just one factor in forming a Country Risk model – See our articles on Understanding Country Risk.
You are welcome to talk to us about how to create your own Country Risk Index or leverage from our own index. which features over 100 different measures, including SDN counts and SDN densities.
Please pick up our financial crime brochure here.