When performing payments screening assurance, we often find issues with the screening of very short and very long names. We expect when testing screening systems that a name from a sanctions list – when placed as an originator or beneficiary in a payments message – will create an alert. However, in practice when we do this, we routinely find issues with short and long names.
There are quite a few very short names on screening lists – by short I mean two or three characters – and they can cause issues with large numbers of false positives unless steps are taken.
Long names present a different challenge, and it is more often than not related to how names are presented in SWIFT MT Messages. SWIFT provide fields for name data which requires the manipulation, interpretation, and truncation of long names to fit within the available space and format. Going forward we will all be using ISO Payments messages that largely remove these restrictions, but right now SWIFT MT is the payment message type that dominates international payments – or at least international payments to higher risk jurisdictions.
There are two separate ways of expressing an originator or beneficiary name, one type has 4 lines of 35 characters for the name and address, the other (50F / 59F) has a structured format with extension lines.
They look like this:
MY VERY LONG COMPANY NAME FITS IN L
IKE THIS
35 HIGH STREET
METROPOLIS1/MY VERY LONG COMPANY NAME FITS IN
1/ LIKE THIS
2/35 HIGH STREET, METROPOLIS
3/GB/UNITED KINGDOM
In the first example the name wraps onto a second line halfway through a word – or does it? It can be hard to tell in some cases if the L and the IKE are two separate words or a single word combined, especially if the word is a proper noun we have not seen before.
Wire transfer regulations require European companies to place not just the name but a second attribute – normally address – into the data as well, and in this example an attempt has been made to do this. This limits the space available for the name.
In the second example – of a structured name – special characters are inserted into the name both to identify the name part from the address part, and to identify extensions to the name across multiple lines. It is not recommended to extend the name beyond two lines as there will not be room for the address information. This in effect limits the name to 66 characters.
These structured names are sometimes poorly handled by screening that either does not have the sophistication to interpret them or has been poorly configured.
But are these long names just a theoretical issue, or do they happen in practise?
We examined the length of company names from the OFAC SDN list, and the length of company names registered in the UK (we chose the UK because it is relatively easy to get access to millions of company names).
As can be seen on the graph the majority of company names are in the 5 and 30 characters long category.
88% of UK Company Names are 33 characters or shorter
75% of OFAC SDN Company Names are 33 characters or shorter
That does leave of a lot of names over 33 characters that will cause difficulties in SWIFT MT messages.
There are a small number of very long names that do create bigger problems. The longest UK Company names are 160 characters long, although the only one that appears to be trading uses a trading name that is only 6 characters long.
OFAC has names of up to 158 characters, the longest being: “FEDERAL GOVERNMENT INSTITUTION PRETRIAL DETENTION CENTER NO 1 OF THE DIRECTORATE OF THE FEDERAL PENITENTIARY SERVICE FOR THE REPUBLIC OF CRIMEA AND SEVASTOPOL”, and this is where the discussions start about screening for theoretical situations versus the situations that do happen day in day out.
The very longest names do not seem likely to be used as originators or beneficiaries of payments. Extremely long names do exist, but shorter trading names are used for practical purposes. Pursuing a system that complies with all theoretical situations could be at the expense of focusing on what is actually happening in your payments. So next time we tell you that an enormously long OFAC name didn’t match on your system, then be ready to risk accept it!
SWIFT MX / ISO Payments messages have name fields – that are only used for names and do not have to share with addresses – of 140 characters, enough for all but 2 OFAC names and 10 UK Company Names. This alleviates this issue, but until ISO Messages become the normal payments system – like they are in SEPA throughout the EU – then we will have to live and adapt to this problem.
