Chapter 3 - Sanctions and PEPs Flashcards
How often should firms screen their customers against sanctions lists?
Periodically and/or ongoing basis.
What are the features of an effective sanctions screening process?
- Flag potential name matches against a consolidated list.
- Potential matches to be reviewed by trained staff.
- True matches should have account frozen.
- True matches to be reported to the LEA or government department.
- The firm should maintain an audit trail for potential and true matches.
How might a firm decide on the type of screening - automated vs. manual?
Nature, size and risk profile of the firm.
What is a key element of a screening system?
Potential matches a flag clearly and prominently.
What should a firm do if they decide on a type of screening system?
Document the reasons for choosing the system.
What are some considerations when using an automated system?
- Testing the effectiveness of the system
- Adequate contingency arrangements should the software fail.
What is fuzzy matching?
Partial or potential matches - matches where names are misspelled, incomplete or missing.
When should sanctions screening take place?
At the start of a business relationship or immediately after the relationship has commenced.
How should enhanced due diligence be applied?
Risk sensitive basis
Why should firms hold info about the circumstances and business of their customers?
- Inform risk assessment process and manage ML and TF risks.
- Provide basis for monitoring customer transactions.
What is OFAC?
Office of Foreign Asset Control - US Treasury.
What powers does OFAC have?
- Freeze assets
- Control transactions
- Enforce economic or trade sanctions.
What is a SDN?
Specially Designated National
What is an SDN list?
A list of individuals and organisations with whom US citizens and permanent residents are prohibited from transacting and doing business with.
Where does the UN get sanctions powers?
Chapter 7 of UN charter
