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Targeted Financial Sanctions

Discover the critical insights and essential knowledge you need to navigate the complex world of Targeted Financial Sanctions with our comprehensive training video.

In today's global economy, financial institutions and professionals are faced with the challenging task of complying with ever-evolving regulations and sanctions regimes. Understanding and effectively implementing Targeted Financial Sanctions is crucial to maintaining financial integrity, security, and international compliance.

Targeted financial sanctions are a critical aspect of financial compliance, especially in the context of anti-money laundering (AML) and counter-terrorism financing (CTF) efforts. This training summary aims to educate individuals and organizations about the importance of understanding and adhering to targeted financial sanctions to remain compliant with the FIA.

Key Concepts:

Targeted Financial Sanctions:

Accountable Institutions (AIs) and Reporting Institutions (RIs), listed in Schedules 1 and 3 of the FIA, should ensure effective implementation of a Targeted Financial Sanctions (TFS) regime as per the FIA and PACOTPAA. In the same vein, sections 24, 25 and 45 of the PACOTPAA collectively require regulatory and supervisory bodies listed in FIA Schedules 2 and 4 to ensure compliance and contribute to risk management efforts.

primarily has two components being: asset freezing without delay and prohibition from making funds or other assets or services, directly or indirectly, available for the benefit of sanctioned individuals, entities, or groups. The PACOTPAA, as per sections 23, 25 and 45 amongst others, regulate the freezing and prohibition obligations.

UNSC sanction screening:

The object of sanctions screening is to implement Targeted Financial Sanctions (TFS) against anyone listed by the UNSC.

Institutions are expected in terms of section 24 and Regulation 15(5)3 of the FIA to screen clients or potential clients involved in transactions against the relevant sanctions lists issued by the UNSC.

Such screening should take place before accounts are opened or client is granted access to services, regardless of whether the client transacts below or above the CDD threshold.

If the Institution in any way makes use of middlemen or brokers/agents to facilitate or avail services, it has an obligation to ensure that such third parties/agents/brokers duly attend to their AML/CFT/CPF responsibilities, if any reliance is placed on them.

This is essential to combat TF and PF activities by ensuring designated persons are identified and not availed services accordingly.

Detected name matches

When name matches or potential matches are detected. If the individual, entity, or group matches all the key identifiers published on the Sanctions Lists, then the result is considered a ‘confirmed match.

The following must be implemented without delay:

a. Immediately upon such confirmation, freeze all funds or other assets associated with such client, persons to the transaction or their associates;

b. Prohibition of making funds or other assets or services available: DNFBPs, VASPs7 and Financial Institutions are prohibited from providing funds or other assets to or rendering financial services or other services related thereto, whether in whole or in part, directly or indirectly, or for the benefit of any designated individual, entity, or group listed by the UNSC; and

c. Urgently report to the FIC without delay (meaning within a few hours). Such should be reported via the Sanctions Name Match Activity (SNMA) report via goAML.

With such reports, ensure to explain the following:

a. “Reason”: indicate the client names that are matched or potential matched with those on a sanctions list.

b. State the specific sanctions list on which the match was detected, for example UNSC 1267. This field is mandatory; ii. “Action”: importantly, explain the nature and type of relevant freezing and prohibition measures taken by the institution filing such report. This field is mandatory; and

c. “Attachments”: attach proof of freezing and prohibition measures taken for SNMA reports. Attachment must include complete identification and address records of listed client/associates; description of frozen assets; client’s address.

Conclusion

Compliance with targeted financial sanctions under the FIA is not only a legal requirement but also a crucial step in safeguarding national security, protecting an organization's reputation, and avoiding financial penalties. By understanding and adhering to these sanctions, individuals and organizations contribute to global efforts to combat financial crimes and promote a safer and more secure financial environment. Stay informed, stay compliant!

Targeted Financial Sanctions Training Video

Targeted Financial Sanctions Quiz

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