The Wolfsberg Group has published new guidance on how financial institutions should carry out their sanctions screening. It says its guidance is intended to help institutions see how screening can form an effective part of a wider sanctions compliance programme. The guidance looks at:
- what screening is – and the fundamentals of transaction and customer screening;
- the fundamental elements of a screening programme – that is having clear policies and procedures, putting a responsible person in charge, carrying out a risk assessment to enable the institution to make risk-based decisions, internal controls and testing;
- a risk-based approach to screening to fit the proximity of the institution to sanctioned countries geographically, culturally and historically, the customer base, volumes of transactions and distribution channels and the services offered;
- technology, alert generation and handling, so institutions minimise the number of low quality or irrelevant alerts, while ensuring properly trained personnel review relevant alerts. The guidance includes points that institutions must consider when building and choosing their technology;
- reference data – and how to assess which data institutions hold is relevant for sanctions screening;
- transaction screening, including how to assess when pre-transaction screening is desirable and how to time it so that a transaction can be stopped if necessary;
- list management, including sourcing and customising of lists; and
- lookbacks – which may suggest a change in the system may be warranted.