Conduct Sanctions Screening with These Simple Steps | RapidAML

Описание: Hi everyone! I’m Muskan Acharya, an AML Consultant working with financial crime compliance.

Welcome to RapidAML, where we simplify everything AML through expert insights.

Today, we’ll be discussing sanctions screening, what it is, and how to conduct it through simple, effective steps. So, let’s get started!

To begin with, let’s understand the meaning of Sanctions Screening.
Sanctions screening is the process of checking customer names against the required sanctions lists to see if there is a match. The required sanctions lists depend on which jurisdiction a business is located in. These lists are usually mandated under a country’s Anti-Money Laundering and Targeted Financial Sanctions or TFS regime. Sanctions screening helps businesses identify sanctioned individuals or entities and report them to AML authorities. It helps businesses avoid engaging with customers who may be involved in financial crimes such as Money Laundering, Terrorism Financing, and Proliferation Financing.

Now, let’s come to the main topic of this video: how to conduct sanctions screening. To conduct sanctions screening, a business must adopt the following steps:

• First, businesses must understand the TFS regime of the country they are operating in and then identify the relevant sanctions lists against which they are required to screen their customers. They must subscribe to these lists to ensure that they are notified whenever any additions or deletions are made to them.
• Second, businesses must collect customer key identifier details. The Know Your Customer or KYC process helps businesses collect and verify such information. Information that must be collected includes name, date of birth, nationality, address, information on beneficial owners in case the customer is a legal entity, etc.
• Third, businesses must search through the sanctions lists to find if the key identifier details of the customer match those of anyone listed in the sanctions lists. To do this, businesses may conduct manual checks or opt for sanctions screening software. A screening software automates the process, making it faster and more accurate.
• The fourth step is disambiguating sanctions screening results. The previous step of running sanctions screening checks may result in matches. These matches need to be further analysed and disambiguated. There can be four types of screening matches:

o Perfect Match, or a match where it is conclusively confirmed that the customer’s details match exactly with a profile on the sanctions lists.
o Partial Match, where customer details match only partially with profiles found during sanctions screening
o False Match, where customer details seem to match with a profile on the sanctions lists at first, but upon further investigation, it is found that none of the key identifier details match with such profile
o No match, when the screening exercise does not generate any results

• The fifth step is escalating the results of a screening outcome to the AML compliance officer in case a perfect match or partial match is found. The AML compliance officer must then investigate the match and report the same to the AML authorities if required. In many jurisdictions, there are mandatory requirements, such as freezing the funds of the sanctioned person, and that must also be complied with. Therefore, businesses must ensure compliance with regulatory reporting, fund freezing, and other obligations, as required under a country’s AML and TFS regimes.

• The last step is ongoing monitoring. Sanctions lists may be updated anytime. It is important to be aware of these updates and screen customers on an ongoing basis to ensure compliance with the AML and TFS laws. Therefore, sanctions screening is not a one-time process.
Throughout these steps, businesses must keep proper documentation of every step of the sanctions screening process, including procedures, steps, methodologies, tools, sanctions lists subscribed to, observations and findings, investigations, internal and external reporting, etc. This record-keeping exercise is also an important part of a business’s AML obligations and must be maintained for the period as required under the AML regime. Usually, this period is five years.

That brings us to the end of today’s discussion on sanctions screening! I hope this breakdown helped you understand the process better. For more expert insights on AML processes, check out RapidAML’s YouTube Channel.

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