Financial Crime World

UNSC Consolidated List: Designated Persons and Entities Face Freeze and Restrictions

The United Nations Security Council (UNSC) has designated several individuals and entities as subject to asset freeze and financial restrictions in a move aimed at disrupting terrorist financing networks. This article outlines the key points of the UNSC Consolidated List, including the requirements for financial institutions to implement targeted financial sanctions (TFS) on corporate accounts, beneficial ownership, loan availment/credit, filing of Suspicious Transaction Reports (STRs), and e-return and STR filings.

Freeze on Corporate Accounts

  • In cases where a corporate account has one or more authorized signatories who are designated persons, financial institutions must implement TFS on the account.
  • The decision to freeze an account will depend on various factors, including the extent of control or authority exercised by the authorized signatory over the corporation.

Beneficial Ownership

  • If a designated person is a beneficial owner of an account, the funds or accounts maintained by that entity must be frozen by financial institutions.
  • TFS guidelines direct all covered persons and relevant government agencies to freeze without prior notice and preserve without delay property or funds involved in any transactions with designated persons or entities.

Impact on Loans

  • The loan availment/credit of designated persons or entities is prohibited under TFS, unless it falls under the allowed exceptions.

Filing of STRs

  • In cases where an immediate family member of a person on the designated list meets the definition of suspicious transaction (ST) under the law, financial institutions must file an STR.
  • Financial institutions must file an e-return and STR even if there is no asset to freeze and no banking relationship remains with a closed account belonging to a designated individual or legal person.

E-Return and STR Filings

  • Financial institutions must indicate the relevant codes in STR filings related to TFS and proliferation finance (PF), including PC12, PC13, PC14, and PC34.

Delisting Process

  • The delisting process for designated persons or entities can be found in Chapters 8-10.6 of the 2021 Sanctions Guidelines and AMLC Regulatory Issuance No. 5 dated July 28, 2021.

For more information on TFS and PF, please contact [insert contact details].