Red Flag List

The SQA Red Flag List is a compendium of words or short phrases that relate to the kind of suspicious activity that a company would normally want to steer clear of.

You cannot ultimately control what your customers are doing with their business, their scruples might be considerably worse than your own. But you should take whatever precautions you can to avoid supporting their business where it is clear & obvious that illicit, immoral, or unlicensed activity is taking place.

It would of course be rather imprudent for your client to openly describe their illicit behaviour in their documentation that you view, but it does happen, & more fool you for passing over a piece of paper that spells out that your client is up to no good.

• A Red Flag list will not find the behaviour that you are looking for, if your clients have taken steps to avoid detection
• A Red Flag list will inevitably create false positives that have to be investigated & eliminated
• A Red Flag list may detect activity that has proper licences & control, so some true matches may not be an issue

However…

• They are increasingly becoming a norm for banks to use in processing both trade finance information & SWIFT payments
• You may find that some terms are more likely than others to create false positives, it is not a regulatory demand to screen for these Red Flags, & you can choose which ones to include, & which ones not to include
• Some categories of Red Flags maybe of concern to you, some may not. You can choose which you want to screen for, & which you do not
• Concerns come & concerns go, a few years ago banks were not concerned with Wildlife Trafficking, now they are. The list will update with new categories as & when they are needed. You should review your need periodically

Get in touch via aml-prevention.products@sqa-consulting.com to discuss Red Flags further & how we can help.