AML data set definitions

Sanctions Screening

Sanctions are measures primarily adopted by governments against a regime, organisation or individual that is believed to be in violation of international law. They are usually political, diplomatic or economic in nature and aim to prohibit illegal activity by high-risk individuals or groups.

Good sanctions data covers all publicly available sanctions lists including, but not limited to, OFAC, UN, HMT, EU and DFAT - plus additional information such as vessels (and their IMO numbers) and banks (and their BIC codes). Sanctions lists are updated daily and are not always congruent across different issuing bodies, and – not least because there can be severe penalties associated with the provision of goods or services to a sanctioned entity - organisations must ensure they screen across the range of sanctions lists regularly and comprehensively. KYC360's data providers monitor sanctions lists around the clock and can be relied upon as best-of-breed resources.

Secondary Sanctions Screening

Secondary sanctions relate to the ownership information of companies and their backers, individuals or organisations that have a link to a sanctioned entity.

Secondary sanction lists include individuals that have a 10% or greater ownership of a business, or other form of control such as that of a board member or senior executive. It is no longer sufficient to only screen primary sanction lists. Regulatory bodies now stipulate that companies must also screen secondary sanction lists to confirm that none of their customers have links to sanctioned individuals. Fines and further punishments can be levied against organisations that are trading with partners that have sanctioned individuals in controlling positions – as these business entities may be used to facilitate financial crime. It is therefore necessary to have access to a large and regularly updated dataset that contains profiles of company ownership, for appropriate secondary sanction screening.

Criminal Watch Lists

Many law enforcement agencies, both on a national and international level, maintain watch lists of known criminals or other ‘persons of interest’. There is considerable risk associated with doing business with an individual that appears on one of these lists.

Watch lists contain individuals that are suspected of a crime, that are pending arrest, and that have been convicted in the past and since released. They are created by law enforcement agencies to keep track of high-risk individuals that are likely to offend. Risks associated with dealing with individuals on law enforcement watch lists can range from fines and/or sanctions to criminal investigation and conviction. A modern business should have access to a sizeable and contemporary dataset to facilitate complete screening of new and existing business against criminal watch lists, and screen such lists on a regular basis.

PEPS & RCAS

A PEP, or politically exposed person, is an individual who holds the office of a prominent political function. Relatives and Close Associates (RCAs) are individuals that are associated to a PEP by a family, friend or business connection, and can include parents, siblings, friends, legal advisors, and business associates. RCAs are also known as ‘secondary PEPs’.

The position of a PEP can mean that they are higher-risk individuals due to the influence and power that their position might hold, which may make them susceptible to bribery and corruption. RCAs (also known as ‘PEPs by association’) can be used to hide illicit activities being committed by the PEP with whom they have ties. Various definitions of PEPs exist – but a useful reference is the FATF (Financial Action Task Force) Recommendation 12  which defines foreign PEPs, domestic PEPs and persons who are or have been entrusted with a prominent function by an international organisation, as well as outlining example red flag indicators. All customers should be screened regularly for PEP and RCA status to properly manage risk, and are flagged as such when searched for through KYC360.

Special Interest Screening

Special Interest Persons (SIPs) and Special Interest Entities (SIEs) are individuals or organisations that present a heightened level of risk due to their suspected or confirmed involvement in criminal activity. Persons and entities in these groups pose huge risk to an organisation, both reputationally and legally.

SIPs can usually be classified as high-profile individuals (see PEPs) who have been involved or are involved with serious organised or financial crime. They have likely been convicted in the past or evidence has been found to substantiate their involvement in criminal activities. Likewise, SIEs are classified as organisations that have suspected ties to major financial/organised crime rings. This might include terrorism financing, trafficking, or war crimes. Effective compliance requires a dataset that contains lists of convicted individuals or sanctioned entities, and any legal proceedings currently being brought against them.

Adverse Media Screening

Adverse media, sometimes called ‘negative news’ or ‘negative press’, is unfavourable information, usually published by news or other media outlets, that can be linked to an individual and that may implicate them in current or historic criminal activity.

Conducting adverse media screening should be a vital component of the KYC process, both when onboarding new clients and as part of your regular screening of your existing customer base. KYC360 offers various types of adverse media screening, depending on the module you’re using. In RiskScreen (powered by KYC360), for example, you can use our proprietary algorithms to search across publicly available information, de-duplicating results for your teams to assess for relevancy and significance. You can also use a second option (Pro search) to dig into the deep web and uncover insights that may not be in the public domain. For more information on KYC360's adverse media options, please click here.