The Wolfsberg Group of international banks on 21st January published new guidance on how Financial Institutions should carry out sanctions screening.  It says that the objective of this publication is for the Wolfsberg Group to provide guidance to FI as they assess the effectiveness of their sanctions screening controls.  As with all materials published by the Wolfsberg Group, these are designed to provide FIs with an industry perspective on effective financial crime risk management.  The guidance includes sections on the definition of sanctions screening, the fundamental elements of a sanctions screening programme, consideration of a risk based approach, technology, alert generation and handling, reference data, transaction screening, list management and lookbacks.

It has also supplied a set of slides highlighting key themes of the guidance.  It says that the key takeaways are –

  • FI should seek to adopt a risk-based approach to sanctions screening and to consider all aspects of a comprehensive sanctions screening control framework;
  • While sanctions screening is a primary control, it has its limitations and should be deployed as part of a wider effective Financial Crime Compliance (FCC) programme, to assist with the identification of sanctioned individuals and organisations;
  • It is important to have a clear strategy with respect to sanctions screening, to mitigate the risk of being exposed to sanctioned parties and countries;
  • The documentation of an FI’s risk appetite and approach to screening is imperative;
  • Technology remains a key enabler in the effectiveness of identifying financial crime risk through screening, making the process more efficient and on a real-time basis; and
  • The FI should ensure that people involved in the end-to-end sanctions screening processes are robustly trained and supervised and that strong management information should be made available to assess the effectiveness of sanctions screening control.

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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