Client: UK Based Financing Body
Dates Completed: 02/2022-04/2022
The Client, a UK based Financing Body, sought to understand it’s potential exposure to the risks of (i) breaching Sanctions, and (ii) entering into relationships with counterparties who have Politically Exposed Persons (‘PEPs’) in their management or Board of Directors.
NLC designed and conducted Sanctions and PEP Risk Assessment is to enable the Client to:
- Inform the firm’s risk-based approach to Sanctions and PEP risks.
- Design/refine policies and procedures that are commensurate with the identified risks.
- Ensure controls were proportionate and pragmatic.
- Identify gaps or opportunities for improvements in policies, procedures and processes.
- Make informed decisions about risk appetite and implementation of control efforts, allocation of resources and technology spend.
- Develop risk mitigation strategies including applicable internal controls and therefore lower a business unit or business line’s residual risk exposure.
- Ensure senior management are made aware of the key risks, control gaps and remediation efforts.
- Ensure regulators and other stakeholders are made aware of the key risks, control gaps and remediation efforts across the firm.
- Assist management in ensuring that resources and priorities are aligned with its risks.
The following principal regulatory sources/industry guidance were considered in formulating the Sanctions/PEP Risk Assessment approach:
- The Wolfsberg Group Frequently Asked Questions on Risk Assessments for Money Laundering, Sanctions and Bribery & Corruption – 2015.
- UK JMLSG Guidance on Risk Assessments – September 2021.
- FCA’s Financial Crime Guide (FCG)- Release 13 – November 2021.
- OFAC Requirements.
- Other relevant UK and EU regulatory sources.
Deliverables included:
- A new Sanctions Policy and supporting Operating Procedures.
- New Sanctions screening procedure for both new and existing counterparties.
Recommendations (later implemented by the client) regarding a suitable screening solution which was procured from a solutions provider.
