At a quick glance, the sanctions lists are simply lists of names, but when you get under the bonnet there are multiple different types of names which need to be assessed for inclusion or exclusion in your screening programme.
Where the decision is made to include the different types of names in your screening programme, you need to be clear that your chosen method for accessing the sanctions lists will provide you with the required names.
The information below takes a look at the different types of data included in the sanctions lists and things that you need to look out for when implementing your screening strategy.
Individual and Organisation names make up the bulk of the names on the sanctions lists, but how many names can one person or organisation have? With a variety of naming conventions across the different lists, it breaks down to a Name with possible Aliases or AKA’s which can then be strong or weak or low quality. As an example, Al Qa’ida has an additional 17 strong AKAs listed within the record on OFAC SDN.
Current OFAC guidance lends itself to excluding weak AKAs from screening but requiring that there is access to the name detail to support the investigations process. The UN consolidated list does categorise names as Low Quality whereas the EU consolidated list has only commenced this practice, with less than 20 names currently categorised as low quality/weak. No guidance has been issued at this point by the EU.
Where you do decide to exclude weak AKAs from screening, you need to be clear on how this will impact common names which have been aggregated into a single profile by a list vendor. If an AKA is categorised as weak by OFAC but not by the UN what do you want to do with this name?
Another type of name which are particularly poor quality and disastrous for false-positive rates are partial names. Many are categorised as weak alias but not all. A partial name is recorded on the sanctions lists with only either a forename or surname, for example, Dr Amin. It is not uncommon for financial institutions to choose to exclude partial names due to the propensity for generating false positives. These names are not identified as partial names on the sanctions lists, so understanding how they can be managed by both the list provider and the screening system will be hugely important.
Other data quality challenges within the lists can be the use of brackets (). For example, on the HMT proscribed terrorist list there are often names included in a bracket “Ajnad Misr (Soldiers of Egypt) – Proscribed November 2014”. The question is how should you handle these names? Are they a valid AKA, arguable yes? Does your list vendor include an additional AKA for those names in the brackets?
Vessel Screening – assuming the decision is made to include vessel information in your screening programme the following will be relevant. Typically, low numbers of vessels and vessel-related details are included on the lists, but they can present significant challenges for screening. In particular, with vessel names due to their make-up which can often be common single names, for example, Amber and Daniel. If the decision is to include vessel names in screening what rules can be applied within the screening system to manage the false positive rate?
Vessel IMO numbers – unique reference codes which stay with the vessel throughout its life, unlike the name which can be changed multiple times. Again, if the decision is made to screen vessel data, you need to be sure that the list provider can and does provide IMO’s in a screenable format.
Vessel Owners – at the time of print there are 5 vessel owners included on the OFAC list against listed vessels. 2 of the 5 are also sanctioned and listed in their own right, whereas the other 3 are not listed separately. If you are screening for vessels and you were doing business with the owner of a sanctioned vessel, you would probably like to know regardless of whether they are sanctioned directly themselves or not. Does the list provider present this data in a screenable format?
In relation to vessels, the decision to include in screening should be evaluated and implemented in line with your risk appetite. Our other articles relating to Vessel screening cover this in more detail.
BIC Codes – Again typically there are low volumes included on the lists, but often the BIC codes for sanctioned banks will be included in the remarks fields. Ensuring direct access to these for the screening system will be important. Does the list vendor provide this data directly or does it remain in the remarks field?
Aircraft Codes – At the time of writing the OFAC SDN list currently contained 278 records for Aircraft Codes. The aircraft codes are listed in the Aircraft Name field, the Remarks field will indicate which airline the aircraft is linked to amongst other details. For example, Aircraft Name: YK-AGC, Remarks: Aircraft Operator Syrianair. More often then not aircraft codes can be considered over screening for typical retail banking. Where you do want to exclude them to help manage your false-positive rate, make sure this is possible to exclude either from your list data or on the screening system.
Chinese Commercial Codes – Currently there is a small number of CTC codes (<20) included on the OFAC SDN list. They are not listed as sanctioned names but within the additional information associated with a list entry within the Identifications section. Depending on where you are operating, they may be of significant relevance for screening. Does your list provider make them directly available?
For further information and support implementing a sanctions screening programme please contact us at SQA Consulting.