SWIFT Financial Crime Compliance

Transcription

1 SWIFT Financial Crime Compliance Benjamin Zaug Senior Product Expert Financial Crime and Compliance Initiatives EMEA UNIVERSWIFTNET March 2017

2 Filtering Why should it be a priority?

3 Sanction Violations are not just for Banks Fines appear to be similar or lower compared to the ones for banks a few years ago. The first identified violations. Higher fines could come with repeated infringement Investigations are also ongoing: Multinationals with US operations European Corporations This impacts: FX houses Remittance business Payment Service Providers Other corporates such as logistics, pharmaceuticals, energy, etc

4 Why should Corporates screen their payments? Screening of payments isn t always compulsory but banks are asking more and more from clients. Corporates may fall under obligations with OFAC if: It processes USD payments It has US operations (the group has to oblige) It buys US goods One of the team member of the payment team is a US individual Etc Compliance impacts the STP rate. A whole file can be rejected for 1 suspicious transaction, slowing down/rejecting thousands of payments. Being under investigation or fined has a huge impact on Corporates Reputational Risk. Some very large Corporates have suffered from the actions of a few individuals

5 Financial Crime Compliance For Corporates Sanction screening Sanction testing List management Operations Back office activities Risk profile Identification And due diligence Start Business Correspondent Behavioral monitoring Name Screening Ongoing due diligence Name Screening Sanction testing

6 Sanctions Screening Service

7 Sanctions Screening an all in one centrally hosted solution Powerful Screening Meeting regulatory demands Comprehensive database of Sanction lists updated and enhanced centrally Good-guys and bad-guys capacity embedded Hit reduction rules centrally manage Powerful algorithm including Fuzzy logic and string matching Screening transactions in real time Simplicity Interface Managing cost and resources User friendly interface, easy to configure No hardware nor software investment needed Strong reporting capacity embedded Quality assurance reporting included 600+ customers including 20 central banks Using a best-in-class filter combined with updated sanction lists and user friendly interface with

8 Public Sanctions lists available 36 Country Australia Description Department of Foreign Affairs and Trade (DFAT) DFAT Autonomous list Country Norway Description Ministry of Foreign Affairs (MFA) list MFA United Nations list Public sanctions lists updated by SWIFT daily Private lists & Good-guys lists managed by the users AND Research-based ownership lists Canada European Union France Hong Kong Japan Netherlands New Zealand China Ukraine DFAT Country Embargoes Office of the Superintendent of F.I. (OFSI) OSFI - United Nations Act Sanctions Department of Foreign Affairs and Trade (DFAIT) DFAIT Countries Embargoes European Official Journal EU Countries Embargoes EU Ukraine Restrictive Measures Journal Officiel français Hong Kong Monetary Authority (HKMA) HKMA Countries Embargoes Ministry of Finance Special Measures Frozen Assets List - Dutch Government New Zealand Police Ministry of Public Security of the PRC State Financial Monitoring Service of Ukraine National Security and Defense Council Singapore Switzerland United Kingdom United Nations United States of America MFA Countries Embargoes Monetary Authority of Singapore - Investor Alert List Terrorism (Suppression of Financing) Act Secrétariat d'etat à l'economie SECO Countries Embargoes Her Majesty's Treasury HMT Countries Embargoes HMT Ukraine Restrictive Measures United Nations UN Countries Embargoes Financial Crimes Enforcement Network (FINCEN) OFAC Specially Designated Nationals OFAC Embargoed Countries OFAC non-specially Designated Nationals, including: OFAC Palestinian Legislative Council OFAC Part 561 OFAC Foreign Sanctions Evaders OFAC Sectoral Sanctions Identifications OFAC Non-SDN Iranian Sanctions Act

9 Implementation options SWIFT Format only Any Formats Your institution Your correspondent Your institution Your correspondent Transparent routing of FIN transactions to the service using FIN-Copy Query/response screening of all transaction types Timeframe Implementation timeline Few weeks Few Months Footprint Installation & integration Zero Limited Flexibility Granularity on what is filtered Limited Unlimited Scope Transactions Screened FIN Cat 1, 2, 4, 7, MT910 All transaction types Same service, same end-user experience, different technical implementation.

10 Name Screening Service

11 Screening Environments Institutions have growing requirements to remain compliant, to ensure they avoid regulatory breaches, de-risking, and reputational damage. Sanctions, Anti Money Laundering, Bribery and Corruption are all now key aspects of compliance. However, the number of areas within an institution which require screening are growing. Institutions are looking for cost effective ways to implement easy to use and effective tools directly into their existing processes which allow them to remain compliant. Trade Clients Onboarding Suppliers Employee Hiring Treasury EDD

12 How does NSS Online work? Entities Data Security Ensured by Physical Tokens Full Audit Reporting Public Lists OFAC, EU, UN, HMT PEP, Additional Research, Adverse Media Private Lists Internal AML Policy Lists NSS Date of Birth Range comparison Results Enter each entity, with additional information. A powerful matching algorithm generates an overall score for each entry Gender comparison Country Adjustable Threshold Matching Elimination Criteria Hit generated Against an entity

13 Sanctions List Distribution Service

14 List Content Challenges FIs want to use source lists for transaction screening. As these are the entities regulators require they screen for, and nothing else. Moving to sources lists from Commercial Lists can help reduce costs. Data Challenges Example of how source data is presented: Process Challenges Sourcing: Multiple regulatory authorities No Common update cycle It is difficult to load into filters It requires standardization Difficulties in formatting: No alignment in formats between issuing authorities No Standard in the way data is presented Poor data quality Operational risk due to manual processes Loading data: multiple lists in multiple formats

15 SLD Standardization, Verification, Assurance SLD s Structure will provide increased Effectiveness and Efficiency For example: Taking information from comment/remarks fields and placing it into the correct fields. No loss of source data, while transforming into a standardised format. SWIFT are using the data model and format endorsed by most regulators Original Source First Name Middle Name Last Name Full Name Address Country DOB Remark Jon Harry Ripley 848 Malibu United States Possible Dates of birth 4/5/1968 and 6/3/1967 Also known as Joe Ripley. Believed to be in Afghanistan. SLD Structured Data First Name Middle Name Last Name Full Name Address Country DOB Remark Jon Harry Ripley Jon Harry Ripley 848 Malibu United States 4/5/1968 6/3/1967 Joe Ripley Joe Ripley 848 Malibu United States 4/5/1968 6/3/1967 Possible Dates of birth 4/5/1968 and 6/3/1967 Also known as Joe Ripley. Believed to be in Afghanistan. Possible Dates of birth 4/5/1968 and 6/3/1967 Also known as Joe Ripley. Believed to be in Afghanistan.

16 Questions. Rejoignez-nous sur le Stand SWIFT pour plus d informations Laetitia Angot Commercial Manager France Monaco Laetitia.angot@swift.com Mickaël Thomas Head of Corporate Business Western Europe Mickael.thomas@swift.com Ben Zaug Senior Product Expert Financial Crime and Compliance Initiatives EMEA Ben.zaug@swift.com

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