War in Ukraine is likely to be detrimental to many jobs in the financial services industry. As markets undergo a period of "extreme volatility" and "the sharpest change to global commodities markets since the 1973 oil embargo" in the words of Goldman Sachs, some traders are already losing money and M&A deals are being put on hold. But one kind of finance professional is likely to become increasingly sought-after: the sanctions specialist.
Sanctions are nothing new. Sanctions were imposed on Russia in 2014 following the invasion of Crimea; Iran has been subject to sanctions since 2006. Most banks already have teams of sanctions experts in place, but the response to the war in Ukraine means their numbers are likely to swell.
"The dynamic and evolving nature of the new sanctions measures has placed unprecedented pressure on compliance teams in terms of assessing the impact, but also updating policies, procedures and guidance, ensuring systems and controls are effectively updated; and asset freezes applied in compressed timescales," says Alan Paterson, founder and managing director at Plenitude Consulting in London. "This has been exacerbated by the incremental nature of the new sanctions, with new measures being revealed each week and sometimes daily."
Paterson says they're already seeing increased demand for interim staff with sanctions knowledge. Permanent hiring is also likely. "Anyone with sanctions knowledge is already in high demand and there’s only a small percentage of people in that space," says Tom Boulderstone, head of legal, compliance and financial crime at recruitment firm Barclay Simpson. "It's too early to say there's been an increase in demand for sanctions specialists yet, but I'd be very surprised if the war does not have a knock-on effect on demand for their expertise."
The Financial Conduct Authority is reportedly already asking banks to provide detailed information on how both individuals and businesses subject to new Russian sanctions move money globally. The Financial Times says that banks that fail to provide information will be judged not to have participated in the required "open and transparent" relationship with regulators.
Failure to adhere to sanctions can result in substantial fines. HSBC, for example, was fined £63.9m in December for failings in its money laundering controls. Standard Chartered was fined a huge $1.1bn for sanctions breaches in 2019. Even before the war, HSBC was hiring for its European sanctions team under Helene Dewing-Kapur, head of sanctions in EMEA.
Andrew Hastings, vice president of regulatory recruitment at Larson Maddox in New York City, says the need for new sanctions expertise will be global. "These extensive sanctions against Russia's financial institutions and wealthiest oligarchs will certainly add to the workload of existing sanctions teams," he says. "They will need to update screening lists and scrutinize transactions as well as current clients to see if any overlap exists in order to protect their firm."
Boulderstone says senior sanctions specialists have an advisory role within financial crime teams. "A lot of financial crime specialists avoid it," he says. "It can be a very, very high risk job."
It can also be very well paid. While sanctions specialists don't earn the sort of money seen in the front office, they do earn more than many other people in compliance. Boulderstone says London fintech firms will pay £140k ($183k) salaries for global sanctions specialists, plus bonuses. Banks will pay £220k+. Compensation was rising even before the war: "Previously, you'd only really get that kind of money as an MRO [money laundering reporting officer]," he adds.
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