Sanction, PEP, SIP and RCA Checks

What are Sanctions and PEPs?

Sanctions are used by governments across the world to restrict - or prohibit entirely - trade with people or organizations involved in criminal activities. OFAC is the Office of Foreign Assets Control, the US department that enforces economic and trade sanctions on countries, regimes and individuals engaged in activities that threaten US national security. OFAC publishes lists of individuals and companies owned or controlled by or acting for or on behalf of sanctioned countries and lists known individuals, groups, and entities involved in terrorism and trafficking.

A PEP - Politically Exposed Person - is someone whose prominent position in public life makes them more vulnerable to bribery and corruption, so it is important to assess the potential money laundering risks of entering into a customer relationship with them.

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We answer your questions about Sanction, PEP, SIP and RCA Checks

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What are SIPs and RCAs?

Special Interest Persons (SIPs) are like PEPs but rather than having an increased risk of money laundering due to their public position, their risk is due to previous involvement, or suspected involvement, in crime. SIPs are people who have been convicted, arrested, or are undergoing investigation for serious financial or organized crime. Relatives and Close Associates (RCAs), sometimes referred to as ‘PEPs by association,’ are related to or have a close connection to a PEP. RCAs will include spouses, partners, family members including in-laws, as well as close friends, legal advisors, and business associates.

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What is Sanction and PEP Screening?

What is Sanction and PEP Screening? Lists of individuals, companies and other entities known to be or suspected of being engaged in anything illegal are issued by governments and financial authorities. Smartsearch’s OFAC Screening includes the SDN (Specially Designated Nationals List), Consolidated Sanctions List, the SSI (Sectoral Sanctions Identifications) List and the FSE (Foreign Sanctions Evaders) List. Sanction and PEP Screening is when businesses use these lists to screen individuals and businesses as part of their customer due diligence, compliance, and AML processes.

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Why is it important to screen for Sanctions, PEPs, SIPs and RCAs?

It is not illegal to do business with PEPs, SIPs or RCAs but knowing if an individual customer or stakeholder of a corporate client is a PEP will help you evaluate the risk of entering into a customer relationship with that individual or business, or halt proceedings altogether if a Sanction is found. It is important to screen for RCAs due to their relationship with someone in a position of authority and influence and their increased proximity to bribery, blackmail, and corruption.

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How do I monitor PEPs, SIPs and RCAs?

Sanction lists are issued by different governments across the world, and while organizations like OFAC offer access to multiple sanctions lists, there is no one central list with all known Sanctions, PEPs, SIPs and RCAs, so keeping records up to date manually virtually impossible. The most reliable way to monitor Sanction lists is via electronic daily monitoring which can accesses multiple lists automatically. SmartSearch uses the Dow Jones Watchlist, which compiles data from more than 1,100 global PEP and Sanction lists and is updated daily.

How we help you

SmartSearch automatically performs Sanction, PEP, SIP and RCA Screening on every AML check you run and will automatically trigger Enhanced Due Diligence on any matches. Our innovative identity verification software filters out any false positives ensuring that you are notified if a true match is confirmed. SmartSearch’s ongoing monitoring service screens all checks against updated Sanction lists every night and alerts you to any changes.

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That’s where we come in

SmartSearch offers an all-in-one solution for your firm’s Customer identification program. Instead of using separate solutions for identity verification, screening, and monitoring, you can onboard customers quickly and securely and meet all your CDD final rule requirements from one place. The user-friendly system enables team members at any level to successfully run AML checks and screen for Sanctions and PEPs, and we are constantly updating and improving the platform to ensure it remains the leading AML solution on the market.

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