Chapter 3: Sanction Screening

AML Sanction Screening: Comprehensive Coverage and Unique Features

Does your sanction screening solution utilize the latest technologies to get real-time data on global regulatory changes?

Compliance Is Key, Screen Every Profile

The case of Payoneer shows that merely deploying a screening solution is not sufficient. Any AML-obligated sector must have a sanctions screening solution with real-time data updating capabilities to enable timely compliance.

Importance Of Sanction Regime Coverage

• Does Your Sanctions Compliance Solution Fit The Dynamics of a Multipolar World?

The shifting balance of power, distinct geopolitical interests, and evolving legal frameworks across different regions necessitate a robust and adaptable sanctions compliance regime.

In a politically multi-polar world, businesses and financial institutions that operate internationally must carefully tread the path of compliance. This is because strategic and valuable customers in one jurisdiction can be high-risk entities in other jurisdictions.

Legacy AML tools flag all sanctioned entities, but compliance officers require context-specific information. Comprehensive sanctions watchlist coverage is crucial for global operations to ensure adherence to international regulations, even when specific sanctions may not directly impact their home country.

• Does The Vendor Offer And Update Data From Sanction Removal Lists?

Sanctions lists maintained by the U.S. Treasury Department (OFAC), the European Union, and other international organizations, and even those created by every country’s regulator are frequently updated.

The Sanctions compliance solution should integrate real-time updates from global sanctions lists to accurately reflect additions or removals of entities, ensuring precise and current records to maintain regulatory compliance and avoid penalties.

The chosen solution also must efficiently update databases to prevent unnecessary flagging of entities removed from sanctions lists, maintain historical records for audit purposes and contextual risk assessments, and conduct enhanced due diligence on recently removed entities to manage ongoing risks.

• Can Your Vendor Customize Sanctions Lists To Match Regional Relevance?

Sanction lists are compiled by different regulatory authorities globally each customized to the political, economic, and security requirements of a given country. However, their regional specificity means that what is critical in one region may not be considered significant in another. This brings about complications for multinationals in that they encounter different compliance laws from one jurisdiction to another.

• A Chinese entity sanctioned by the United States’s Office of Foreign Assets Control may not have a high risk for all the obliged sectors in China. Similarly, a US business sanctioned by China may not be a high-risk entity for many of the obliged sectors in the United States.

This leads to potential complexities in compliance requirements while operating globally.

Common Challenges With Legacy Vendors

Delayed Lists Updates

Most of the AML screening vendors fail to update their sanctions lists databases frequently, leaving gaps allowing designated individuals and entities to pass undetected. A delay of even 24 hours can result in unauthorized entities and transactions passing through, putting your company at risk.

Inadequate Data Consistency

Sanction lists come in various formats and languages, making standardization a challenge. While sanctions screening solutions may have comprehensive data coverage their name-matching algorithms may not be robust enough to handle diversity due to diverse name conventions and faulty transliteration outcomes resulting in a higher number of false positives and negatives.

Limited Screening Scope

Some providers only adhere to major sanction lists, ignoring regional or sanctions lists by smaller jurisdictions. This limited scope can make multinational companies vulnerable to local regulatory penalties.

What Does AML Watcher Do?

Real-Time Data Processing

AML Watcher databases refresh every fifteen minutes, providing the quickest and most reliable sanctioned data in the industry; whether it is about the addition or removal of any entity. The system is built on an event-driven architecture, where changes in sanctions lists trigger automatic updates throughout the platform. This ensures that any new or modified data is quickly shown in the compliance checks.

Advanced-Data Enrichment

AML Watcher not only collects but also standardizes and enriches data from global regulatory authorities. This also encompasses extracting and categorizing key data like; DOB, ID numbers, images, and locations which helps enrich the volume and efficacy of screenings.

Extensive Sanction Coverage

AML Watcher covers a broad spectrum of global and regional lists, ensuring comprehensive compliance no matter where you operate. With AML Watcher, you get access to a wide range of sanction regimes, including lesser-known regional lists. This extensive coverage ensures that you are always in compliance, regardless of smaller to large jurisdictions.

Customizable Screening Parameters

Every company has unique compliance needs. AML Watcher allows you to tailor your screening parameters to fit your specific risk appetite and regulatory environment. This customization enhances the effectiveness of your compliance program.