Because many names may be common, various potential matches may be found. A potential match is when there is any match between data in the sanctions lists with any information in the LFI’s databases. However, it does not necessarily mean that the individual or entity the LFI is dealing with is subject to sanctions. When identifying the potential match, LFIs should suspend any transaction until they are satisfied it is not a Listed Person.

LFIs should compare potential matches with the UN Consolidated List and the Local Terrorist List in order to confirm whether they are true matches and to eliminate “false positives.” LFIs should compare information that is known about the party in question, such as date of birth and address, with other information provided in the designation order. Furthermore, LFIs should undertake efforts to obtain additional information and identification documents, which may have previously not been obtained from the customer or a counterparty to ascertain whether the customer is the actual designated person in the case of similar or common names. If the LFI establishes that the match is a false positive, then the LFI does not need to freezing or apply Other Measures related to sanctions. Therefore, the LFI may allow the transaction or relationship to continue its normal course, provided that the transaction or relationship is not suspicious and does not trigger any other concerns. LFIs are required to maintain evidence of the false positive verification process in their records and make them available to the competent authorities immediately upon request.

LFIs may create a “white list” (or a “good customer list”) of names of customers that have been flagged as potential matches to the UN Consolidated List and the Local Terrorist List but subsequently cleared through thorough due diligence by the LFI. Those “white lists” may be used to improve the process related to screening by leveraging the results of past due diligences and reducing the number of false positives. While an LFI should not overly rely on such a list and must diligently and continuously screen customers and transactions in case they are implicated in updated UN Consolidated List and Local Terrorist List, the use of such a “white list” may assist the LFI in expediting the dispositioning in case of repeated false positive matches. LFIs should have documented procedures to managing and periodically reviewing and updating those “white lists”.

For more details and information, please refer to Annex 2 for related Lessons learned from CBUAE Supervision.