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Sanctions Screening Guidance for Financial Institutions

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The Wolfsberg Group’s Sanctions Screening Guidance document provides a comprehensive framework for financial institutions (FIs) to effectively screen transactions against sanctions lists. This article provides an overview of Section 5 and 5.3, highlighting key points and best practices.

Transactional Attributes: Identifying Relevant Data Elements

Section 5: Transactional Attributes

This section focuses on the data elements within transactions that are relevant for sanctions screening. FIs should initially assess which transaction types are relevant and identify which attributes within those records are relevant for sanctions screening.

Key Points

• Names of parties involved in the transaction are relevant for list-based sanctions programs.
• Addresses are more relevant to geographic sanctions programs.
• Bank identification codes may be relevant for both list and geographically based sanctions programs.
• Detection of sectoral sanctions risk typically requires detection of multiple factors, such as targeted parties and prohibited activities.

Manner, Timing, and Frequency: Screening at Critical Points

Section 5.3: Manner, Timing, and Frequency

This section emphasizes the importance of transaction screening at a point in time where a transaction can be stopped before a potential violation occurs. FIs should direct particular attention to points within the transactional process where relevant information could be changed, modified, or removed.

Key Points

• Transactional records are typically screened at several points in the lifecycle of a transaction.
• Screening should occur prior to executing any commitment to move funds.
• Relevant information could be changed, modified, or removed to undermine screening controls.