How do I handle a possible hit on my electronic screening check?
AML Services Manager
Begin by focusing on the list that is called out within your hit. Remember, most screening providers screen beyond simply PEPs and Sanctions.
Thirdfort screening, for example, covers;
Watchlists - target law-breaking activities, as well as non-compliant behaviours at the international level, in particular jurisdictions or specific industries.
Warning and Regulatory Enforcement - involved in law-breaking activities at the international level or in particular jurisdictions under investigation or found guilty of regulatory breaches in their operating industry, which may indicate a significant financial, compliance, or reputational risk.
Fitness and Probity - committed transgressions but might not necessarily have committed offences that would lead them to be denied funds or bank accounts.
Politically exposed persons (PEPs)
I have a potential hit. Where do I begin?
First, look for any biographical information which pertains to your client and the individual named within the potential hit. The devil is in the details and paying close attention to the details is the best way to independently make a judgement if the potential hit is one of the same person.
Specific information that could assist and we should pay close attention to (this is a non-exhaustive list):
AKA (also known as an alias)
Date of birth
Other simple measures may include;
Understand in more detail the client's occupation, source funds and wealth
Information in the public domain, such as parliament and government websites, Companies House
If you exhaust all avenues to independently rule out a possible hit, you can ask the client directly to provide insights you may even seek a self-declaration.
An example of how this could work in practice; you hold your client's passport (recording their name and date of birth). You screen the client and a warning hit for individual X returns. The potential hit includes a link within the body of the court documents. Court documents name X as a previous director of Y. A search of Y on Companies House names X as a previous director of Y. The Companies House directors record identifies X's full name (including middle name) and partial date of birth (month and year). This additional information enables the firm to understand if the hit is the same individual as their client, comparing the date of birth and name given on the official identification documents that have been verified via the electronic check.
The most important part is to document and record your rationale and considerations. If appropriate, always save any corresponding evidence that supports the position. If it isn’t written down, it will be presumed that it didn't happen.
Remember why we undertake the screening of our clients?
It is not to deny people access to regulated services for legitimate transactions but to mitigate the risk of legal services being used for the purposes of money laundering, breaching the sanctions regime and protecting the firm from harm and damage, including reputational.
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