Korea Development Bank Establishes Internal Control System "Preparing for Economic Sanctions Risk"

[Asia Economy Reporter Bu Aeri] Korea Development Bank (KDB) announced on the 9th that it has completed the establishment of a systematic internal control system called the Sanction Compliance Program (SCP).

The SCP is an internal control mechanism designed to proactively and autonomously manage the risks of economic sanctions. KDB explained that it aims to control the risks of sanctions violations in response to the global business expansion and the trend of strengthening financial regulations.

Based on due diligence and advice from external law firms, KDB established the "KDB-type SCP" by incorporating the five key SCP components proposed by the U.S. Office of Foreign Assets Control (OFAC): management commitment, risk assessment, internal controls, independent audit, and management reporting and training.

This includes the issuance of a declaration expressing the commitment to comply with economic sanctions (posted on the English website), preparation of internal regulations based on law firm due diligence, improvement of business procedures to prepare for sanction screening, establishment of systems for detailed review, independent audits, and employee training.

A KDB official stated, "We plan to strengthen compliance with economic sanctions laws, including prohibiting or restricting transactions related to sanctioned parties. Through the establishment of this global-level SCP, we expect to enable systematic and effective responses to economic sanctions risks, and we will continue to focus on strengthening risk control against sanctions violations through the SCP in the future."