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AZERBAIJAN: Understanding Sanctions Screening to Reduce Risk and Comply with Regulations

In today’s global financial landscape, accurately identifying Politically Exposed Persons (PEPs) and sanctioned individuals is crucial to reduce risk and comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations. The consequences of non-compliance can be severe, from hefty fines to reputational damage.

What are PEPs?

PEPs are individuals who have held or currently hold prominent public positions, such as heads of state, mayors, religious leaders, or local government officials. These individuals are often at risk of corruption and impersonation due to their high profile.

What are the risks of conducting business with a PEP?

While it is not prohibited to do business with a PEP, greater caution should be taken when dealing with them. The risk of impersonation has been exacerbated by advances in deepfake technology, making it essential to carry out additional due diligence checks.

Are relatives and associates also considered high-risk?

Yes, relatives, such as wives, husbands, children, and wider family members, as well as close associates, including business partners and employees of a PEP, should also be checked and monitored to the same level as the PEP.

What are sanctions?

Sanctions are punitive or restrictive measures designed to maintain or restore international security. These measures can take various forms, including trade restrictions, asset freezes, travel bans, and financial penalties.

Who issues sanctions?

Governments and international organizations such as the United Nations, European Union, and Organisation for Security and Cooperation in Europe (OSCE) issue sanctions.

How do PEPs and sanctions screening relate to AML processes?

Sanctions screening is an integral part of the AML process, designed to detect and prevent money laundering and terrorist financing. It helps organizations comply with regulatory requirements, mitigate risks, and contribute to global efforts to combat financial crime.

What are the potential consequences for businesses that fail to comply with PEPs and sanctions screening regulations?

Non-compliance can result in severe legal, financial, and reputational consequences, including hefty fines, legal action, exclusion from certain markets, and loss of trust among customers, partners, and investors.

Are you looking to conduct PEPs and sanctions screening?

Experian’s CrossCore Watchlist Service provides a simple and reliable solution for conducting PEPs and sanctions screening. With real-time screening across a comprehensive global database of PEPs and sanctions lists, our solution ensures accurate identification and monitoring of high-risk individuals.

Learn more about Experian’s CrossCore Watchlist Service

For more information about CrossCore Watchlist Service, please fill out the form below to receive a detailed breakdown of its benefits and how it works.