Sanctioned ownership and control
Which control finds customers and counterparties owned or controlled by blocked persons, not only named on a list?
A scenario that places here
example"Sanctioned ownership: customers 50 percent owned by blocked persons"
Channels it applies to
3 of the 20 in the dictionaryWIN COR TRD
International wires, correspondent accounts and trade finance: one sector each on the coverage chart, hatched where no scenario reaches it.
Obligations
4 regimes| Regime | Obligation |
|---|---|
| Bank Secrecy Act and its regulations (31 CFR Chapter X) | BSA BSA-AML-07 Beneficial Ownership Identification |
| FATF 40 Recommendations | FATF R.6 Targeted financial sanctions related to terrorism and terrorist financing |
| Anti-Money Laundering and Counter-Terrorism Financing Act (Australia) | AUSTRAC AMLCTF-SANCTIONS Sanctions Screening |
| OFAC framework for sanctions compliance commitments | OFAC OFAC-SCP-2.2 Customer and Counterparty Due Diligence |
The obligations, quoted
BSA BSA-AML-07 Beneficial Ownership IdentificationFor legal entity customers, institutions shall identify and verify beneficial owners (25 percent ownership) and one control person.
Where programmes usually fall short: Old customers not back-filled; Verification only documentary
Source: Bank Secrecy Act and its regulations (31 CFR Chapter X)
FATF R.6 Targeted financial sanctions related to terrorism and terrorist financingCountries implement targeted financial sanctions regimes giving effect to the UN Security Council resolutions on terrorism and terrorist financing, freezing without delay the funds and other assets of persons and entities designated by or under the authority of the Security Council under Chapter VII (resolution 1267 and successors) or designated by the country under resolution 1373, and ensuring that no funds or assets are made available to or for their benefit; the Interpretive Note sets the designation authorities and procedures, the freezing obligations without delay and without prior notice, the prohibitions, the communication of designations, the reporting duties of institutions, the delisting and unfreezing procedures and access to frozen funds for basic expenses.
Where programmes usually fall short: Freezing dependent on a court order that takes days; No domestic designation mechanism under resolution 1373
Source: FATF 40 Recommendations
AUSTRAC AMLCTF-SANCTIONS Sanctions ScreeningScreen customers and transactions against DFAT consolidated list and UN sanctions to comply with autonomous sanctions.
Where programmes usually fall short: No sanctions screening
Source: Anti-Money Laundering and Counter-Terrorism Financing Act (Australia)
OFAC OFAC-SCP-2.2 Customer and Counterparty Due DiligenceThe organization must perform risk-based due diligence on customers, counterparties, and intermediaries to identify direct or indirect connections to sanctioned persons, including ownership analysis under the 50 Percent Rule.
Where programmes usually fall short: Beneficial ownership lookups stop at 25 percent and miss the OFAC 50 percent aggregation rule; No refresh trigger when ownership changes are detected
Source: OFAC framework for sanctions compliance commitments