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Complex Modern Sanctions Require Robust Compliance Programs

Financial institutions need to maintain a Sanctions Compliance Program capable of preventing transactions prohibited by governments against entities, individuals, and other countries. A Sanctions Risk & Controls Assessment is essential to optimize your Sanctions Compliance Program.

Sia Partners employs a team of former regulators and sanctions subject matter experts with extensive experience conducting Sanctions Risk & Controls Assessments. This makes Sia Partners uniquely positioned to help you optimize your Sanctions Compliance Program and ensure compliance with ever-changing and increasingly complex global and local regulations.

 

What has changed?

Over the last two decades, there has been a significant increase in financial sanctions issued. At the same time, sanctions programs have increased in complexity and scope. As a result, financial institutions face increasing challenges in ensuring compliance with obligations driven by these changes to the sanctions landscape. 

What has changed?

  • Frequency at which sanctions rules change has increased, requiring more flexible and agile methodologies for implementing rules
  • Participation from other regulatory bodies (historically dominated by OFAC – Office of Foreign Assets Control), resulting in the layered application of sanctions rules
  • More sanctions programs are targeting securities and transactions with complex nuances, increasing risk exposure due to manual processes required to supplement system limitations

Sia Partners Approach

Sia Partners strives to deliver highly customizable strategic, operational, and technology solutions to clients, to meet global sanctions regulations. Our solutions offering is a culmination of the firm’s combined years of experience and expertise in sanctions screening within the Financial Services industry. We help our clients navigate the constantly evolving sanctions landscape utilizing a risk-based approach. 

Managing and mitigating risk

Sanctions Risk Assessment

Sia Partners can perform the annual Sanctions Risk Assessment to accurately reflect the organization’s risk profile and assess the effectiveness of the controls to mitigate risks.

Sanctions Advisory

Sia Partners can perform an advisory/counsel function to evaluate client risk from a Sanctions perspective.

 

Sanctions Screening Solutions

Model Validation

Sia Partners can conduct independent model validation of sanction screening systems assessing the effectiveness of systems, data integrity, and processes.

Sanctions Filtering, Testing, and Tuning

All Sanctions Programs must include a Sanctions Filtering Program capable of preventing transactions that are prohibited by local and global regulatory entities. Our custom AI solution, the Sanctions Challenger Bot, is a Model Validation and Optimization tool designed to enable the fine-tuning of your sanctions filtering system by providing insight into the underlying matching algorithm and score settings.

Robust sanctions compliance programs

Governance

Our subject matter experts can create, edit, or enhance your institution's Sanctions policies and procedures. 

Compliance Testing

Sia Partners can review Sanctions policies, procedures, and control frameworks.

Training

Sia Partners has extensive experience training institutions on the most current Sanctions Programs and Procedures. Most jurisdictions recommend Sanctions-specific training delivered annually, at a minimum, to all appropriate personnel. 

Reporting and Certification

Final Report

Once we have completed our Sanctions Risk & Controls Assessment, we formalize findings, conclusions, and recommendations into a final report to present to Senior Management on the sanctions program.

 

A Sampling of Credentials

  • Understand the Bank’s business nature and lines of business
  • Review and understand the Bank’s compliance program governance, structure, and risk profile
  • Establish a Review Matrix adhering to Part 504 requirements and implications
  • Validate and test the data integrity feeding to both Sanctions Filtering and Transaction Monitoring programs
  • Validate and test the configuration setup on both Sanctions Filtering and Transaction Monitoring programs
  • Review the alert management processes
  • Reviewed Bank’s Compliance regarding NYDFS 504 in terms of governance, policies, and procedures
  • Performed extensive testing on 3 sanction screening, by testing over 10k scenarios in various formats: exact names, simple/medium/high complexity fuzzy variations, SWIFT messages, FED/CHIPS/Check/ACH formats
  • Performed  extensive testing of the transaction monitoring system with detailed testing of all 20 existing scenarios
  • Report findings and provide enhancements to Fuzzy logic, Systems Configuration, and Governance
  • Draft a report which serves in support of formal Compliance Attestation related to NYSDFS Part 504 
  • Understand the Automatic Sanction Screening Design
  • Execute Sanction Screening Testing on On-boarding and Payment Processing
  • Evaluate the Change Control and Management Process over the Sanction Screening Automation and Algorithm
  • Understand the AML Monitoring Data Mapping Design
  • Evaluate the Data Conversion Logic
  • Prepare Data Validation Testing
  • Execute Data Validation Testing
  • Evaluate the Data Integrity Change Control Process and Management
  • Reviewed vendor provided upgrade that introduced a new fuzzy algorithm to the engine: Jaro-Winkler
  • Established baseline scenarios, and performed full re-testing and tuning exercise 
  • Tested efficiency and effectiveness and defined new scenarios
  • Reviewed all existing scenarios of the Bank
  • Using 1 year's worth of payment data and alerts, calibrated models and proposed rule tuning, and defined new scenarios
  • Feasibility Study of new Sanction Screening Tool using Sanction Challenger
  • Analytics-assisted Lookback exercise for sanction screening
  • Reviewed MR(I)As and used our tools as supporting evidence for enhancements to regulators

 

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