Q&A with Coline Cauvin: Banks and other FIs must continuously refine their compliance measures to effectively detect and prevent any potential breaches.

Coline Cauvin joined ACQUIS as a Senior Associate in March 2024, strengthening our sanctions & compliance practice and presence in Paris. She further diversifies our sanctions and export control capabilities by bringing substantial expertise in advising financial institutions and international clients on compliance and enforcement-related matters.

You previously worked at a Big4 law firm in Paris, what were the main factors behind your decision to join ACQUIS?

Coline: Joining ACQUIS felt like the perfect step forward in my career, especially given my focus on international sanctions law. I was drawn to Acquis’s reputation as a boutique firm that excels in this niche field. My decision was also influenced by the opportunity to grow within a firm that is also engaged in EU regulatory affairs and policy advisory. The firm’s Brussels headquarters offers proximity to the heart of EU policy- and decision-makers, providing an invaluable strategic advantage for staying ahead in the rapidly evolving sanctions landscape.

With ACQUIS, I can also leverage my French and US (New York) dual qualifications offering comprehensive advice on complex projects involving both EU and US sanctions matters. The chance to contribute to ACQUIS’s mission of providing expert guidance on the complexities of sanctions while also advancing my professional development made joining the firm an ideal choice.

You regularly advise financial institutions on sanctions compliance issues. In your opinion, what are the main challenges faced by the financial sector in this field?

Coline: Sanctions regulations are evolving rapidly and increasingly intricate, often changing with little warning to sectoral players. This creates significant challenges for financial institutions, particularly when it comes to designing and maintaining effective sanctions compliance programs and screening systems that can keep up with these changes. The importance of reliable, up-to-date data is essential for monitoring transactions and ensuring compliance.

Through my experience assisting banking clients during regulatory controls by French supervisory authorities, I have witnessed firsthand the stringent expectations they have for compliance programs. Enforcement authorities are increasingly focused on scrutinizing underlying transactions, not just asset freezes. As the primary gatekeepers of sanctions compliance, financial institutions are expected to perform additional controls and enhance their due diligence to spot sanctions breaches by other industries, including sanctions circumvention. This heightened responsibility means that banks and other FIs must continuously refine their compliance measures to effectively detect and prevent any potential breaches.

What are the specifics of French sanctions enforcement and how does it compare with the rest of the EU?

Coline: French sanctions enforcement is particularly centralised, which makes it stand out compared to a more fragmented regulatory landscape in other EU Member States. The French Treasury (Direction Générale du Trésor, or DGT) is at the forefront, ensuring that compliance with both French and EU sanctions is strictly observed.  In addition, most recently, the French customs authorities have also been stepping up their enforcement efforts, as seen in their shutdown of a sanctions circumvention operation in May 2024[1]. This shows a growing trend toward more active enforcement across different agencies.

In addition to the DGT, the Autorité de Contrôle Prudentiel et de Résolution (ACPR) plays a critical role, especially in overseeing financial institutions (FIs). The ACPR conducts investigations and can take enforcement actions if it finds that a financial institution’s asset freeze compliance program is not strong enough, even if no breach of asset freeze measures has occurred yet. Additionally, the ACPR, along with the DGT, have issued important guidelines on asset freezes that the financial industry must adhere to.

While France’s enforcement system is more centralized than in other EU Member States, other authorities like the customs and the ACPR are increasingly proactive in their respective areas. This also creates challenges for businesses operating across multiple EU jurisdictions, as they need to navigate the different regulatory actors and, sometimes, their varying interpretations and requirements.

As a dual-qualified lawyer, you advise clients on EU and US sanctions matters. How do you see the future of US and EU sanctions?

Coline: Looking ahead, I think sanctions will become even more targeted and sophisticated, focusing on specific sectors and individuals. This will create new challenges for businesses, especially those that must navigate both US and EU regulations, which are sometimes aligned but not identical.

The recent sanctions on Russia have demonstrated an unprecedented level of coordination between the US and the EU, along with the G7, setting a new standard for coordination and collaboration – see, for instance, the recently issued G7 Industry Guidance as a point in case. In the future, this approach could lead to more effective and synchronised measures, allowing businesses to adopt a more holistic approach to sanctions compliance and export controls.

Additionally, while this unified approach has worked regarding Russia sanctions, it may not extend as smoothly to other countries like, for instance, China. While we have seen increasing tensions and the potential for more targeted economic security measures, the EU and the US might have different interests and views. Having worked extensively on both EU and international sanctions, I feel well-prepared to guide clients through this increasingly complex landscape. As sanctions regulations continue to evolve, I’m excited to support clients navigating these changes and ensure they remain compliant while achieving their business goals.

  [1] CP-Lutte_contournement_sanctions_prises_encontre_Russie.pdf (douane.gouv.fr)

Do you have any questions related to the above-discussed topics?
Contact Coline for guidance.