Financial Crime World

Financial Institutions Must Screen Against Watch and Sanctions Lists to Comply with Anti-Money Laundering Regulations

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In the ongoing effort to combat money laundering and terrorist financing, financial institutions (FIs) must remain vigilant in their efforts to screen against watch and sanctions lists. A recent report highlights the complexities involved in this process and provides a checklist for FIs to ensure compliance.

Identifying Parties Involved in Transactions

To comply with anti-money laundering regulations, FIs must identify and verify the identity of parties involved in transactions. This includes:

  • Collecting information about the transaction
  • Providing reasons why it was flagged as suspicious
  • Reporting suspicious activity to Financial Intelligence Units (FIUs) in each jurisdiction

Importance of Independent Testing of AML Programs

The report also emphasizes the importance of independent testing of AML programs every 12-18 months, or more frequently if required by risk profile. The test plan should be executed and supervised by people with expertise in:

  • Subject matter
  • Auditing requirements
  • Institution type

Leveraging Technology for Compliance

FIs can leverage technology to reduce the burden of compliance, including:

  • Customer identification
  • Due diligence
  • Sanctions and watch list screening
  • Transaction monitoring
  • Suspicious activity detection and investigation

Alessa’s AML Compliance Solutions

Alessa, a leading provider of AML compliance solutions, offers software that can help FIs meet changing regulations proactively. For more information on how Alessa’s solutions can assist your compliance needs, contact us today.

Key Takeaways

  • Financial institutions must screen against watch and sanctions lists to comply with anti-money laundering regulations.
  • The process involves identifying and verifying the identity of parties involved in transactions, collecting information about the transaction, and reporting suspicious activity to FIUs.
  • Independent testing of AML programs is essential every 12-18 months, or more frequently if required by risk profile.
  • Technology can be leveraged to reduce the burden of compliance, including customer identification, due diligence, sanctions and watch list screening, transaction monitoring, and suspicious activity detection and investigation.

Source: Alessa’s Anti-Money Laundering Compliance Checklist.