AML Data Set Definitions
A brief guide to common data sets included in screening services
- Sanctions and secondary sanctions
- PEPs & RCAs
- Criminal watchlists and persons of special interest
- Adverse media
A brief guide to common data sets included in screening services
The penalties for dealing with a sanctioned entity can be very severe. Comprehensive and regular sanctions screening is vital.
Secondary sanctions relate to the ownership information of companies and their backers, individuals or organisations that have a link to a sanctioned entity.
Watchlists contain individuals that are suspected of a crime, that are pending arrest, and that have been convicted in the past and since released.
The screening of all customers for PEP status is essential to the management of bribery and corruption risk and compliance with the EDD provisions applicable to PEP relationships.
Special Interest Persons and Special Interest Entities are individuals or organisations that present a heightened level of risk due to their suspected or confirmed involvement in criminal activity.
Adverse media is unfavourable information that can be linked to an individual and that may implicate them in criminal activity – key to knowing your customer.
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. RiskScreen’s data providers monitor sanctions lists around the clock and can be relied upon as best-of-breed resources.
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.
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 RiskScreen.
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.
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. RiskScreen offers various types of adverse media screening, depending on the module you’re using. In RiskScreen Core, 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 using RiskScreen for adverse media searches, please contact us.
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