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Why PEP and sanctions screening is important for your business

Published on
December 1, 2022
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PEP and sanctions screening ensures that the reputation, revenue, and capital of your business is protected and safe. Corruption is a trillion-dollar problem, and we have a solution to keep you as far away from it as possible.

Trillions of Reasons to Understand and Implement PEP Screening

With approximately $1 trillion in bribes issued every year, and the total amount of corruption being valued at $3.6 trillion, it’s in the best interest of every financial institution to prevent such crimes. PEP (Politically Exposed Person) screening is a policy aimed at hindering illegal activities like bribery and corruption and can often have an incredibly positive impact on fraud prevention and other illicit activities.

The Power of PEP Fraud Prevention

Politically Exposed Persons (PEPs) are high-risk customers with an above-average opportunity to acquire assets through illegal means, often in the shape of bribes or money laundering. In screening these people, you are reducing your risk of financial exposure, and ensuring that you’re honouring AML (Anti-Money Laundering) compliance programs.

PEP & Sanction screening is essential to both international peace and the overall global security. Whether it helps prevent conflicts, support democracy, uphold national and international laws, or successfully protects human rights, it is an integral part of the international efforts to combat money laundering, terrorism financing, and other monetary crimes.

Two people make a PEP & Sanction check

Sanction lists and the financial implications

Should you end up on a Sanctions List, such as the EU Sanctions List, you do become immediately subject to economic Sanctions. Such a list can include both entire countries and global entities or organizations, and lists are not exclusive to just individuals. It simply applies to anyone or anything that is engaged in, or suspected of, money laundering or terrorism financing activities.

Sanctions can include, but are not limited to; freezing of assets, travel bans (restrictions on admission), arms embargoes, limitations on investments, and restrictions on market access, trade and exports.

Why is PEP & Sanction Screening Important?

In sticking with the EU as an example, financial institutions must integrate an EU Sanctions search as part of their AML program when onboarding new customers to ensure compliance. Failure to comply may trigger financial penalties and criminal charges.

Transacting with customers who appear on PEPs and Sanctions lists naturally puts organizations at great risk, as non-compliance with watch list screening may expose your financial institution to steep regulatory fees. A failure to identify bad actors or their links to organized crime, in whatever capacity, may also lead to potentially irreversible damage to your reputation. This can have devastating and almost immediate consequences.

Unfortunately, manually performing PEP and sanctions screenings for every new customer or client can be both time consuming and draining, especially as the lists change frequently. While best practices include the integration of high quality and trusted data sources, taking a risk-based approach to PEPs, and conducting ongoing monitoring of both individuals and entities, the best way to reduce risk and fraudulent activity is by relying on best-in-class technology platforms, like the ones we offer here at ZignSec.

Automated Checks are the Answer

Performing automated checks with a top-class screening tool reduces the risk of the manual process, eases the often-intense administrative burden, and helps firms deliver the compliance performance that the regulators require.

At ZignSec, we offer real-time access to multiple global PEP and sanctions lists. With vast geographical coverage and best-in-class service, we provide you with a robust and effective way to carry out an initial risk assessment. Our platform, which is 100% friction-free and takes a market-centric approach to ensure that we deliver the best coverage, consolidates global PEP lists, government Sanction lists, anti-terrorism lists, and bespoke geographic lists. Last but not least, because you can query the results using our all-in-one REST API, staying compliant with evolving and ever-changing AML regulations have never been easier.

Let us show you what we can do

Contact us today at sales@zignsec.com, or book a demo, to learn more about how you can protect yourself, your institution, and your customers with our friction-free PEP/Sanction screening and other KYC solutions.

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