Counter Terrorism Financing Customer Compliance Services
It is important for all organizations to make sure that they are in compliance with all regulations and this includes counter-terrorism financing (CFT). All anti-terrorism compliance should begin with mandatory client verification. This is critical for companies, organizations, and professionals, as it makes sure that they are not unknowingly (or knowingly) providing funds to individuals who might have ties to terrorist organizations.
In this manner, customer identifications, risk assessments, and ongoing monitoring of all clients is an important part of remaining in compliance with all regulations when it comes to counter-terrorism financing.
Identifying Customers and Conducting a Risk Assessment
- PEP Screening: PEP stands for politically-exposed persons. These are individuals who are at a high risk of being bribed or influenced in a political manner. Often, PEPs include individuals who have previously held a prominent public position, senior politicians, officials who are ranked highly in political parties, and executives of corporations that are owned by the government.
- Sanctions Screening: It is also important to conduct sanctions screening. This type of screening process involves conducting specialized searches and both national and global databases. The goal is to prevent the financing of terrorist organizations, arms proliferation, and other illegal activities.
Why Is it Important To Screen for PEP and Sanctions?
- Geographic location
- Their industry
- The nature of their business
- The size and pattern of their transactions
- Their known business relationships
Furthermore, there are legal and financial professionals who could be at risk of unknowingly engaging in these activities. They could act on behalf of foreign clients, receiving payments to manage their funds. Therefore, having an effective PEP and sanctions screening program in place can reduce the risk of potential financial fraud.
Finally, it is also critical for all businesses to maintain compliance with the most recent FATF Recommendations. If a client does qualify as a potential PEP, and businesses are obligated to apply Enhanced Due Diligence (EDD) screening measures to complete the risk assessment. This is one of the most important parts of KYC and AML. If a client falls under the sanctions list, then additional rules apply and the institution might be prohibited from providing services to that client.
What Are the Benefits of This Screening?
- At Truth Technologies, we are able to carry out these screenings at a reasonable cost for businesses of all sizes
- With automated screening processes in place, this cuts down on the amount of time it takes to conduct these searches
- Any and all clients who trigger a positive alert are automatically subjected to EDD to safeguard the operations of the business
- Companies will remain in compliance with the latest rules and regulations of the countries in which they operate, producing legal risk
- All alerts and screening processes are documented thoroughly in a case management system so that they can be referred to in the event of an audit
- This will ease the minds of investors who are worried that the company could be exposed to indue risk in the world of AML and KYC
- Enhanced screening protocols will also help increase the transparency of tax impacts stemming from client relationships
What Are the Current Regulations: The Risk of Non-Compliance
- Under the USA PATRIOT Act, PEP and Sanctions screenings are compulsory
- PEP screening is required for all political figures and immediate family members
- The OFAC has placed embargoes on foreign terrorists and known international narcotics traffickers
- Sanctions screening checks are required against the SDN List, the Foreign Sanctions Evaders List, and the Iran Sanctions Act List
- Businesses are prohibited from engaging in operations with anyone who is on a sanctions list
Clearly, there are a lot of screening protocols to follow. That is where we can help you. Define for non-compliance could be as high as millions of dollars. Therefore, remain in compliance, avoid funding terrorist organizations, and reduce your risk. Contact Truth Technologies today to learn more about how we can help you with CFT, PEP, and Sanctions screening!