Sanctions screening requirements include that a FI should:
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A. B. C. D.C
Sanctions screening requirements refer to the measures that financial institutions (FIs) must take to ensure that they are not inadvertently engaging in transactions with individuals or entities that are subject to economic and trade sanctions imposed by governments or international bodies. These sanctions are typically imposed as a means of exerting political pressure or punishing individuals or entities that engage in activities deemed harmful to international security or human rights.
The correct answer to the question is B: compare customer and transaction records against periodically updated sanctions lists provided by governmental bodies.
This requirement means that FIs must regularly screen their customer and transaction records against sanctions lists maintained by governmental bodies, such as the US Department of the Treasury's Office of Foreign Assets Control (OFAC) or the United Nations Security Council. These lists identify individuals, entities, and countries subject to sanctions, and may include information such as names, addresses, and identifying numbers.
By screening customer and transaction records against these lists, FIs can identify whether they are doing business with individuals or entities subject to sanctions. If a match is found, the FI may need to take additional steps, such as conducting further due diligence, reporting the transaction to the appropriate authorities, or blocking the transaction altogether.
It is important to note that sanctions screening requirements do not necessarily require FIs to immediately close or freeze the account of an individual or entity that appears on a sanctions list. Instead, FIs must conduct further investigation to determine whether the individual or entity is indeed subject to sanctions and whether any additional action is necessary.
In summary, the correct answer to the question is B: compare customer and transaction records against periodically updated sanctions lists provided by governmental bodies. This requirement helps FIs to identify potential sanctions risks and take appropriate steps to mitigate those risks, such as conducting further due diligence or reporting suspicious transactions to the appropriate authorities.