Assessing the name and location of a customer is a key risk rating assessment function during the customer due diligence phase.
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As dictated by regulatory and compliance requirements, financial firms need to screen the names and locations of their customers against the below lists:
- OFAC Specially Designated Nationals Blocked Persons List (SDN List)
- OFAC Sectoral Sanctions List
- OFAC Foreign Sanctions Evaders List (FSE)
- OFAC Palestinian Legislative Council (NS-PLC) list
- OFAC Country Sanctioned lists
- Most Updated Section 311 Special Measures List
- Most Updated Section 314a List
- Most Updated Section 314b List
- United Nations Sanctioned Country List
- All sanctions lists issued by the local jurisdiction’s regulatory agencies
- Any other lists required as applicable under local law
In most cases, whenever there is a match, (i.e., the customer is identified on a politically exposed person or SDN list), the staff performing the assessment should rate the client as a high-risk customer.
At the same time, the staff needs to escalate the case to the AML compliance officer or team responsible for conducting enhanced customer due diligence so that a more extensive verification or monitoring can be performed.
Sanctions lists include the Office of Foreign Assets Control (OFAC) SDN list, the UN sanctioned list, and any restricted persons list issued by that country’s regulatory body.
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