Jamaica’s Financial Institutions Must Stay Ahead of Sanctions Screening Game

Money Laundering and Terrorist Financing Risk Index Rises in Jamaica

Jamaica has consistently ranked high on the global money laundering and terrorist financing risk index, with a score of 5.99 out of 10 in 2020 according to the Basel AML Index. This places it among the top ten countries in Latin America and the Caribbean with the highest risk index. As a result, financial institutions (FIs) in Jamaica must be proactive in identifying potential risks and taking steps to mitigate them.

Sanctions Screening: A Crucial Control for FIs

Sanctions screening is a crucial control employed by FIs to detect, prevent, and manage sanctions risk. It involves comparing customer data against publicly available watchlists, such as the UN and Office of Foreign Assets Control (OFAC) sanctions list, as well as internal lists maintained by the organization.

The Process of Sanctions Screening

In Jamaica, sanctions screening has become an essential aspect of cross-border transactions. The process typically involves:

• Sending client data and transaction parties to a screening service for comparison against watchlists
• Confirming or ruling out potential matches as false positives

Best Practices for Using Sanctions Lists

To ensure effective sanctions screening, FIs must:

• Use regularly updated lists
• Have procedures in place to screen existing customers regularly, including Politically Exposed Persons (PEPs)
• Consider factors such as name, date of birth, and country when determining match percentages
• Constantly assess the accuracy of the list
• Handle common prefixes, secondary names, suffixes, and non-Latin characters
• Meet regulatory requirements while satisfying internal risk appetite

OFAC’s 50 Percent Rule

When looking at entity ownership, FIs must also take into account OFAC’s 50 Percent Rule.

Conclusion

In light of these complexities, Jamaican FIs are urged to conduct a thorough review of their sanctions screening procedures to ensure they are adequately prepared to meet the ever-increasing demands of regulatory compliance. By staying ahead of the game, FIs can protect themselves from reputational damage and financial loss.