LFIs should screen all payments prior to completing the transaction (also referred to as “real-time” screening), utilizing all transaction records necessary to the movement of value between parties and at a point in the transaction where detection of a sanctions risk is actionable to prevent a violation. The LFI should then identify which attributes within those records are relevant for sanctions screening and the context in which they become relevant. As with name screening, names of parties involved in a transaction are relevant for list-based sanctions programs, whereas addresses are more relevant to screening against geographic sanctions programs but can be used as identifying information to help distinguish a potential or true match from a false match under a list-based program. Other data elements, such as bank identification codes, may be relevant for both list-based and geographic sanctions programs.

Some data elements are more relevant for sanctions screening purposes when found in combination with other attributes or references. For example, detection of sectoral sanctions risk typically requires detection of multiple factors, such as those where both the targeted parties and the prohibited activities are involved. Where automated controls alone may not be capable of detecting both factors simultaneously, manual review of the associated activity may be required alongside review to confirm a true match to applicable sanctions lists. In addition, certain data elements offer little or no risk mitigation through screening, for example, amounts, dates, and transaction reference numbers have no relevance from a screening perspective, although they may be relevant for TM or other risk management purposes.

Data relevant for transaction screening may include:

Transaction screening should be performed at a point in time where a transaction can be stopped and before a potential violation occurs. This typically occurs at a number of points in the lifecycle of a transaction, but certainly prior to executing any commitment to move funds. Particular attention should be directed to any points within the transactional process where relevant information could be changed, modified, or removed in order to undermine screening controls.

Transactional records are typically found in large volumes and within business processes predicated on speed of execution. These transaction types are generally in electronic form and conducive to systemic, automated screening. Some transaction types, however, still rely on documentation in various formats and varying methods of presentation. LFIs may employ text analytics tools such as optical character recognition (“OCR”) that automatically convert paper documentation into electronic data that can then be screened against applicable sanctions lists, but some paper-based transactions, such as documentary trade finance transactions, may require manual screening processes, where relevant information is physically added into a system for screening. OCR requires quality assurance validation to ensure the information has been captured fully and accurately. Certain paper-based transactions, such as paper cheque clearing, where the volumes can be high and the manual screening process creates high rates of errors, may rely on controls other than screening, such as CDD/KYC processes, where the sanctions risks for the product are assessed as being low.