UN Security Council Sanctions Lists: Client Screening Against Relevant Lists Upon Take-On or Account Opening

The United Nations (UN) Security Council has implemented various sanctions lists to combat terrorism, weapons proliferation, and other threats to international peace and security. As part of its efforts to prevent the misuse of financial systems for illicit activities, the Financial Intelligence Centre (FIC) requires all financial institutions to screen their clients against these relevant UN Security Council sanctions lists upon take-on or account opening.

Timely Screening

The FIC has set strict timelines for financial institutions to conduct this screening. The assessment team must complete its review of the client’s compliance with these requirements within 5 working days of finalizing the assessment. Management must also provide any necessary inputs within 5 working days of discussing the draft report.

Assessment Findings and Progress Tracking

The FIC conducts a comprehensive assessment to determine whether clients are complying with relevant UN Security Council sanctions lists. The assessment team identifies material exceptions and highlights these in their reports. After testing, the team calls for an exit meeting with management to discuss these exceptions and any necessary remedial measures.

• The final report is presented within 10 working days of receiving management’s inputs.
• The report directs the client to periodically report on progress made in implementing remedial measures, which could be quarterly or as indicated by the FIC.

Remedial Measures and Progress Tracking

During this phase, clients are required to provide periodic reports on their progress in implementing remedial measures. The FIC reviews these reports and assesses whether they effectively mitigate ML/TF/PF risks. If necessary, the FIC may seek additional information or conduct further assessments to gain assurance.

Compliance Ratings Assigned

The revised assessment methodology now includes a mechanism to rate the levels of risk mitigation in each assessment. This helps reflect progress made by clients in addressing identified shortcomings and demonstrates the impact of the FIC’s supervisory activities.

Impact on Client Operations

Clients are expected to take necessary steps to mitigate ML/TF/PF risks and ensure compliance with UN Security Council sanctions lists. Failure to do so may result in enforcement actions, including referral for investigation or prosecution.

• The FIC’s monitoring and supervision activities aim to prevent the materialization of ML, TF, and PF risks within the financial sector.
• By screening clients against relevant UN Security Council sanctions lists and conducting regular assessments, the FIC helps ensure that financial institutions are not inadvertently facilitating illicit activities.