sanctions.io’s Post

📣Ｄｉｄ ｙｏｕ ｋｎｏｗ… "Negative media" often referred to as "adverse media", in the context of sanctions refers to unfavorable or adverse news or media coverage related to individuals, entities, or jurisdictions that may be subject to sanctions or are considered high-risk. Such type of media typically includes reports or information linking the subject to illegal activities, financial crimes, terrorism, human rights violations, corruption, or other activities that could trigger sanctions or indicate a potential risk. Few reasons why Negative media is very important: ⚠Negative media, can provide early warning signs of potential risks associated with individuals, entities, or countries subject to sanctions. It helps organizations identify individuals or entities involved in illegal activities, such as money laundering, terrorism financing, or corruption, which may not yet be formally sanctioned but pose a significant compliance risk. ⚠FIs need to manage their reputations carefully, especially in financial services. Being associated with entities that have been negatively portrayed in the media can lead to reputational damage, even if there is no formal sanction. ⚠Negative media often includes information from global sources, offering insights into risks that may not be apparent in local or official records. This broadens the scope of risk assessment and helps organizations stay ahead of emerging threats ⚠Regulatory bodies expect FIs to conduct thorough due diligence, which includes monitoring negative media. Failing to consider adverse media in compliance processes can result in penalties, fines, or other regulatory actions, as regulators view this as a critical component of an effective compliance program.   When entities or individuals appear in negative media, it often triggers EDD procedures. This involves deeper investigation and scrutiny, ensuring that organizations do not unknowingly engage with high-risk or sanctioned parties. By monitoring negative media, FIs can take proactive measures to avoid violations of sanctions. This includes freezing transactions, halting business relationships, or reporting suspicious activity to authorities before any formal sanctions are imposed.   𝑫𝒐 𝒚𝒐𝒖 𝒘𝒂𝒏𝒕 𝒕𝒐 𝒂𝒅𝒅 𝒂𝒏𝒚𝒕𝒉𝒊𝒏𝒈 𝒎𝒐𝒓𝒆? 𝗟𝗲𝘁 𝗺𝗲 𝗵𝗮𝘃𝗲 𝘆𝗼𝘂𝗿 𝗳𝗲𝗲𝗱𝗯𝗮𝗰𝗸 𝗼𝗻 “𝗗𝗜𝗗 𝗬𝗢𝗨 𝗞𝗡𝗢𝗪…” 𝗦𝗲𝗿𝗶𝗲𝘀 👍🏻Like and share this with your contacts. 🏹 To Learn more, Subscribe to Financial Crimes Digest, a newsletter that provides young and aspiring banking & Compliance professionals with an outline on Fin Crime. https://lnkd.in/dgfeT8NR 🤝 Follow 𝑨𝑴𝑳 𝒂𝒏𝒅 𝑪𝒐𝒎𝒑𝒍𝒊𝒂𝒏𝒄𝒆 𝑳𝒆𝒂𝒓𝒏𝒊𝒏𝒈 𝑪𝒉𝒂𝒏𝒏𝒆𝒍 for latest updates https://lnkd.in/giM95PAD 💡 Follow Girish Mallya to plan your learning journey and read exciting content! #risk #AMLCoach #moneylaundering #aml #cft #amlcft #Compliance #AntiMoneyLaundering

No Need to Sweat the Small Stuff! In my experience, there seems to be a high level of fear, or, perception that AML Compliance is stifling innovation. 🕥 Timing could also be playing a vital role, as the need for cross-border transactions is bigger than ever before, for many, many reasons. ✍️ Sanctions and the displacement of people are just two major issues for the financial sector. I don’t see that innovation is being targeted by a totalitarian centralised control mechanism, for no freedom for its citizens. Regulations aren’t designed to micro manage or prevent business. Know Your Customer (KYC) regulations are just one part of a much broader framework aimed at combating financial crimes like money laundering and terrorist financing. I’ve broken down the broader framework into 5️⃣ key areas: 1️⃣ High-Risk Transactions Management: Financial institutions are required to monitor and manage high-risk transactions, which could include large cash transactions, transactions from high-risk countries, or those that do not fit the typical pattern of customer activity. The goal is to identify and mitigate potential risks associated with these transactions. 2️⃣ Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD): Beyond basic KYC, these processes involve deeper verification of the customer's identity, understanding their financial activities, and assessing the risks they pose. EDD is particularly important for high-risk customers, including politically exposed persons (PEPs), or those with ties to high-risk countries. 3️⃣ Ultimate Beneficial Owners (UBOs): Regulations often require the identification of UBOs—the natural persons who ultimately own or control a legal entity. This is crucial in preventing individuals from using complex corporate structures to hide their identity and illicit activities. 4️⃣ Terrorist Financing and Sanctions: Financial institutions must screen their clients against terrorist lists and sanctions imposed by governments and international bodies. This ensures that they are not inadvertently facilitating terrorist activities or breaching international sanctions. 5️⃣ Cross-Border Transactions: As you noted, the need for bad actors to move funds across borders is a significant concern. Regulations require that cross-border transactions be monitored more closely due to the higher risks of money laundering and other illegal activities. 🌎 These regulations aim to create a safer financial environment by ensuring that financial institutions know their customers, understand their financial dealings, and can identify and report suspicious activities to the authorities. 💲Each aspect of the regulation plays a critical role in a comprehensive strategy to deter, detect, and disrupt illegal financial flows. 🥊 I do expect some counter arguments on the effectiveness of regulations, which only brings to the surface the scale of the problems.

Level Up! Certified in Sanctions Compliance Bootcamp - including AML/KYC lectures Excited to announce I've earned my certification in the Sanctions Compliance Bootcamp, including a deep dive into AML/KYC, thanks to the insightful lectures by Florian Haufe via the Financial Crime Academy on Udemy! This intensive program provided a comprehensive understanding of the critical world of sanctions and anti-money laundering regulations. Here's what I learned: Sanctions Foundations: Unpacked the origins and legal frameworks behind sanctions, gaining a solid foundation for their importance in the global financial landscape. Selected Sanction Regulations: Mastered the complexities of specific sanction regimes from major governing bodies like the UN, EU, and US. Sanctions Violations: Sharpened my awareness of the potential consequences of non-compliance, including hefty fines and reputational damage. Risk Mitigation: Developed strategies to identify and minimize sanctions risks within an organization. KYC & Sanctions Screening: Honed my KYC (Know Your Customer) procedures and mastered effective sanctions list screening. This knowledge equips me to make a significant contribution to a robust and compliant financial system. Looking forward to leveraging these skills to: Strengthen Internal Controls: Identify and address potential vulnerabilities in existing compliance frameworks. Enhance Risk Management: Implement effective risk mitigation strategies to avoid sanctions violations. Promote Ethical Business Practices: A strong understanding of AML/KYC fosters a culture of transparency and combats financial crime. A huge thank you to Florian Haufe and the Financial Crime Academy for this valuable training! #sanctionscompliance #aml #kyc #financialcrime #riskmanagement #udemycertification

SANCTION SCREENING In today's global business landscape, compliance challenges are on the rise, with "sanctions screening" emerging as a vital yet complex process. Sanctions screening involves checking individuals, groups, or companies against various sanction lists to ensure compliance with trade and financial restrictions. A sanction list is a compilation of individuals, entities, or countries that are subject to sanctions imposed by a government, international organization, or regulatory body. These lists, maintained by governmental bodies like the UN, OFAC, and the EU, target entities involved in illegal activities, such as money laundering, terrorism or terrorism financing, human rights violations, or other illicit behaviors. Imagine a red flag system for individuals, entities, and countries deemed a risk by international bodies or individual nations. Failure to comply can result in hefty fines, reputational damage, and even criminal prosecution. To conduct effective sanction screening, businesses need to collect specific information from customers, including full name, alternate names, date of birth, registration number, country of incorporation, key trading partners, ultimate beneficial ownership (UBO) information, etc. This information is typically collected as part of KYC and the screening itself is done during onboarding as well as periodically throughout the relationship as sanction lists are constantly evolving. Sanctions screening is mandatory across industries, notably in finance and healthcare. Various governing bodies worldwide maintain and update sanction lists, such as the UN, US Treasury Department, EU, OFAC, individual countries, and the Financial Action Task Force (FATF). Additionally, non-governmental organizations compile their own lists targeting entities involved in controversial activities. By adopting robust procedures, staying informed, and seeking expert guidance, businesses can navigate sanction screening complexities effectively and ensure compliance and ethical practices. Let's discuss! Share your thoughts and experiences on sanction screening in the comments below.     PS: Image generated by Copilot Ai, and powered by DALL E 3

Have you ever heard of Proliferation Financing (PF)? Recently, regulators globally are implementing stricter measures to help businesses identify and mitigate PF risks. To understand the risk, the Financial Action Task Force (FATF) has outlined strategies businesses can employ: • Sanctions Screening: Vet businesses and individuals to safeguard against illegal activities and ensure compliance. • Know Your Customer (KYC): Implement KYC guidelines and carefully examine Customers during onboarding to identify unusual transactions and uncover PF activities. • Monitor Transactions: Monitor transactions involving dual-use goods or controlled commodities, as these can signal PF activity. #Compliance #Legal #Risk #proliferationfinancing #kyc #transactionmonitoring

In December 2023, The FSRA of Abu Dhabi Global Market (ADGM) announced some significant revisions to its Anti-Money Laundering (AML) and sanctions rules and guidance in alignment with the UAE's federal regulatory framework. Now, what are the key changes? ·       A better positioning of the applicability of Federal AML Legislation in ADGM along with updated references from the ADGM rulebook to incorporate the federal AML legislation and guidance and expects all Persons in the ADGM to have a current understanding of their obligations under Federal AML Legislation. ·       Introduction of a whistleblowing protection clause, emphasizing the importance of reporting concerns in accordance with Article 27 of Federal Decree Law No. (20) of 2018 on Anti-Money Laundering, Combatting the Financing of Terrorism and Financing of Illegal Organisations, which states that Companies, Directors and Employees are protected from criminal, civil or administrative penalty or sanction when providing any information, including confidential information, as part of a good faith report made. ·       Updated definitions, including AML/TFS, GoAML, IMF, HMT etc, ensuring clarity and consistency in interpretation and removal of outdated definitions such as Federal Law No.1 of 2004, Federal Law No.4 of 2002, and Federal Law No.7 of 2014. ·       Clearer guidelines on the application of sanctions, including relevant sanction lists, to enhance understanding and adherence and addition of specific terminology addressing proliferation financing, strengthening the regulatory framework against illicit financial activities. ·       Strengthened requirements for conducting thorough business risk assessments, promoting a more robust risk management approach and detailed guidance on Customer Due Diligence processes which will help financial institutions in implementing effective risk-based customer assessments. ·       Guidance on Financial Action Task Force (FATF) jurisdictions under increased monitoring or subject to a call for action, aligning with international standards. ·       Revisions to guidance on wire transfers and the Travel Rule to be aligned with evolving financial transaction regulations. ·       Enhanced requirements to comply with targeted financial sanctions and other international obligations, ensuring a proactive stance against financial crimes. ·       Updated screening requirements for applicable government, regulatory, and international findings list, ensuring due diligence practices. ·       Updated guidelines on the freezing of assets, aligning with the latest regulatory expectations and international best practices. ·       Revised requirements for non-profit organizations, considering their unique legal and operational structure within the AML framework. Are you a regulated firm or DNFBP in ADGM? Connect with MS to know more about the key amendments & to ensure you are compliant with the regulations.

KYC Learnings | Post 10 Sanctions Screening 1️⃣ It is to screen clients or prospective clients to ensure that they are not (and are not owned or controlled by) a designated person under applicable sanctions regimes. 2️⃣Sanctions Screening is an Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) control used to detect, prevent, and disrupt financial crime. 3️⃣Regulated businesses must conduct sanctions risk screening as a mandatory practice for effective sanctions compliance. This step is a crucial component of the Know Your Customer (KYC) process, which ensures thorough due diligence and risk mitigation. 4️⃣ It involves checking an organization’s existing and potential customers, partners, and transactions against global sanctions lists to identify financial risks and ensure compliance with international regulations. 5️⃣Sanctions screening should be performed at several key stages to maintain compliance. The initial screening has to take place when onboarding a new client or partner 6️⃣It should happen regularly throughout the customer relationship lifecycle. This is because sanctions statuses can change over time. A customer who was not a sanctioned party during onboarding or initial risk assessment might become one later. Would love to hear from you. As of now, I have posted 10 posts (including this one) on KYC space. Do share if these basics are helping you understand this space better. Link to my previous post (Post 09): https://lnkd.in/dvtXdpEi [ Views expressed above are personal and this Post is aimed at basic awareness on KYC/CDD for those who are interested in learning more on this subject and also are looking at careers in this space ] #kyc #knowyourcustomer #knowledgesharing #knowledgeispower #Cdd #3pillarsofKYC #Customeridentification #clientduediligence #screening #sanctionsscreening #sanctions #transactionmonitoring #aml #sourceoffunds #sourceofwealth #SoW #banking #sof #pep #politicallyexposedperson

Sanctions Screening in KYC: Why It Is Significant Ensuring compliance with global regulations is more critical than ever. 🌍 One of the key components of an effective Know Your Customer (KYC) process is sanctions screening. But why is this so crucial? Sanctions Screening involves checking customers against lists of individuals and entities subject to international sanctions. This step is vital for: Mitigating Risk: Identifying and avoiding transactions with sanctioned individuals or organizations helps protect your business from legal and reputational damage. Ensuring Compliance: Adhering to sanctions regulations is not just about avoiding penalties; it's about maintaining the integrity and trust of your business. Safeguarding Reputation: By ensuring that your clients and partners are not involved in prohibited activities, you uphold your company’s reputation and ethical standards. 🔹 Best Practices for Effective Sanctions Screening: Regular Updates: Sanctions lists are constantly changing. Ensure your screening tools are updated regularly. Comprehensive Screening: Use robust systems that check names against multiple sanction lists. Training and Awareness: Equip your team with the knowledge they need to handle sanctions screening efficiently and effectively. Incorporating rigorous sanctions screening into your KYC processes not only helps in meeting regulatory requirements but also contributes to a more secure and trustworthy business environment. #SanctionsScreening #KYC #Compliance #FinancialSecurity #RegulatoryCompliance #RiskManagement

https://lnkd.in/g_d5axE8 Expert View from Sin Yee Koh, Integrity Consulting: "I have been a compliance consultant for almost a decade, and each time I conduct a mock inspection of a customer’s AML/CFT systems, I am always surprised by how many lapses there are, even with firms that have been established for many years where there are one or two in-house compliance officers.” More quotes on sanctions/AML compliance can be found in Hubbis' publication