ARC 2014 SWIFT Compliance
-
Upload
swift -
Category
Technology
-
view
455 -
download
3
description
Transcript of ARC 2014 SWIFT Compliance
Compliance
Marrakech, June 2014
Compliance
• Sanctions Screening
• SWIFT KYC Registry
A quick and easy route to comply
with sanctions regulations
Sanctions Screening
4
Sanctions Fines
Context
• Regulatory scrutiny and enforcement
of sanctions policies is increasing
• Available screening solutions complex
and costly to maintain
• Challenges for low-volume financial
institutions
5
SWIFT offers a centralised
Sanctions Screening service
for low volume clients
Your institution
Sanctions Screening over SWIFT
6
Your correspondents
• Screening engine & user interface
• Centrally hosted and operated by SWIFT
• No local software installation & integration
• Real-time
• Sanctions list update service
Public, Private & Good Guys Lists
7
Public Lists
29 Public Sanctions
lists supported
Private List
Good Guys List
• AU – Australia Department of Foreign Affairs and Trade
• AU - DFAT Countries Embargoes
• AU - DFAT Iran Specified Entities List
• CA – Canada Foreign Affairs and International Trade
• CA - FAIT Countries Embargoes
• CA - Office of the Superintendent of Financial Institutions
• CA - OSFI - United Nations Act Sanctions
• CN - People's Republic of China - Ministry of Public Security
• EU - EUROPE Countries Embargoes
• EU - European Official Journal
• FR - Journal Officiel français
• HK - Hong Kong Monetary Authority
• HK - HKMA Countries Embargoes
• JP - Ministry of Finance
• NL - Frozen Assets List - Dutch Government
• NZ - New Zealand Police
• SG - Singapore MAS - Investor Alert List
• CH - Switzerland Secrétariat d’Etat à l’Economie
• CH - SECO Countries Embargoes
• UK - Her Majestys Treasury
• UK - HMT Countries Embargoes
• UN - United Nations
• UN - UN Countries Embargoes
• US - Office of Foreign Assets Control SDN list
• US - OFAC Palestinian Legislative Council
• US - OFAC Part 561 list
• US - OFAC Foreign Sanctions Evaders
• US - Financial Crimes Enforcement Network
• US - OFAC Countries Embargoes
Settings
8
Transaction Type (Domestic/International)
Message Categories
(1, 2, 4, 7)
Public Lists
Message Types
Screening engine Sanctions Portal
SWIFT Network
FINcopy
Transaction is
copied
Decision to deliver (no hit / false positive)
or abort transaction (true hit)
Transaction abort notification (true hit)
1
5
Service
user
Sending institution
Managed by SWIFT
Service overview – as a sender
9
Outgoing transaction
1
3
2 4
Transaction is delivered
as-is (no hit or false positive)
Receiving
institution
Service overview – as a receiver
10
Service
user
Transaction is
copied
Transaction is delivered
as-is (no hit or false positive)
Instruction to deliver
transaction
Transaction is delivered
flagged (true hit)
2 4
Outgoing transaction
1
Sending institution
1
1
Receiving
institution
Screening engine Sanctions Portal
Managed by SWIFT
SWIFT Network
FINcopy
Screening Report
11
Audit Report
12
13
• Easy to implement
• Simple to use
• Cost efficient
• Compliance
• Peace of mind
Benefits
4 June 2014
193 Clients
83 Countries
Sanctions Screening
Demo
Demo
notification
Your institution
Messages resulting in alerts
are temporarily held in the
filter and notified to the
bank for investigation
Your correspondents
The Level 1 user logs-in to the
Sanctions portal to review the
alerts
L1 user
Your institution
Your correspondents
The Level 1 user selects one
of the pending alerts to view
the details
Your institution
Your correspondents
Message content
Hits generated by
the message &
sanctions list
identifier
Sanctions list
record detail
Escalate to
Level 2
L2 user
Release the
message
Your institution
Your correspondents L2 user
Abort or Flag
the message Release the
message
Your institution
Your correspondents L2 user
abort notif.
When the user confirms a true hit on an outgoing message:
• The original message is aborted
• An abort notification (MT019) is sent to the user
Your institution
Your correspondents L2 user
When the user confirms a true hit on an incoming message:
• The original message is flagged…
• …then delivered to the recipient that routes it to a special queue
for appropriate processing
special queue
• Screening of other Message formats –
non FIN (e.g. SEPA)
• Screening of additional FIN Messages
Categories (e.g. Cat 3, 5 & 9)
• Screening messages sent through SWIFT
or non-SWIFT channels
• Screening of messages before sent to
SWIFT or non-SWIFT channels
Sanctions Screening: FIN - SAF
Interface
Alliance
Access
Connector
for
Sanctions
Back Office
Sanctions
Screening
FIN Interface
Different channels: FIN - SAF
Back Office
SWIFT
/other network
Current FIN channel
SAF (Screening of Any Format) New
SWIFT
Transaction to be screened
“Good” transaction
“Rejected” transaction
23
24
Q&A
?
SWIFT KYC Registry
26
The context An unprecedented challenge to comply with KYC legal requirements
Information is unavailable
or of poor quality
Complex, inconsistent
requirements across
jurisdictions
Cumbersome, repetitive
and inefficient bilateral
exchanges
27
The solution A web-based central platform to collect, store and access KYC information
7,000+ banks on SWIFT
Trusted third party (member-owned)
Leverage SWIFT membership
process to collect ‘basic’ data
Part of SWIFT Compliance
Roadmap (industry-driven)
28
Collection of data and documents
• Structured data
• Supporting documents
• Maintenance
• Archiving and versioning
The principles A single source of correspondent banking KYC information
Controls and validation
• Completeness
• Validity
• Accuracy
Value added services
• SWIFT Profile:
standard report based on traffic data and owned by the reporting institution
Reporting and monitoring
• Platform activity
reporting and practices
• Audit trail
• Notifications
SWIFT KYC Registry – Content Structure
Entity summary
I. Identification of the Customer
II. Ownership and Management Structure
III. Type of Business and Client Base
IV. Compliance Information
V. Tax Information
SWIFT KYC Registry – 2014 – Confidentiality: Public
30
Registry Controls
• Fact-based and documented
validation process
• Yearly revalidation of all information
• Data quality ratings visible to all
• No judgemental or opinion-making controls
31
SWIFT Profile Level 1
Does Bank A have correspondent
banking activity with entities located
in countries under close monitoring of
the FATF?
0%
<5%
5-20%
>20%
Direct (in/outbound flows)
Indirect (originating/beneficiary
country)
0%
<5%
5-20%
>20%
All currencies
US Dollar
All except US Dollar
Payments
Trade Finance
SWIFT Profile A new way to bring more transparency on your correspondent’s activities
Direct (in/outbound flows)
Indirect (originating/beneficiary
country)
SWIFT Profile Level 2 - “Nested Countries”
Bank A’s correspondent banking
traffic with concerned FATF
jurisdictions. Share per country:
All currencies
US Dollar
All except US Dollar
Payments
Trade Finance
SWIFT Profile Level 3 - “Nested Correspondents”
Identities of Bank A’s nested
correspondents per concerned jurisdiction:
All currencies
US Dollar
All except US Dollar
Payments
Trade Finance
Country BIC Code Bank Name
Turkey TRBATRIS Turkish Bank A
TRBATRIS Turkish Bank B
TRBATRIS Turkish Bank C
TRBATRIS Turkish Bank D
TRBATRIS Turkish Bank E
TRBATRIS Turkish Bank F
TRBATRIS Turkish Bank G
TRBATRIS Turkish Bank H
TRBATRIS Turkish Bank I
Indonesia IDBAIDJX Indonesian Bank A
IDBAIDJX Indonesian Bank B
IDBAIDJX Indonesian Bank C
IDBAIDJX Indonesian Bank D
IDBAIDJX Indonesian Bank E
IDBAIDJX Indonesian Bank F
IDBAIDJX Indonesian Bank G
IDBAIDJX Indonesian Bank H
IDBAIDJX Indonesian Bank I
32
Mock-up examples
33
Mock-up examples
Create draft
Submit draft
34
Request access to counterparties’ data
Mock-up examples
35 35
The Benefits
Reduced
complexity
Greater
transparency Saves time
and money
standardisation effectiveness efficiency
36
January ’14
• Formal announcement of KYC Registry initiative
• Start of KYC Working Group
• Begin data collection with Working Group
September ’14
• Open KYC Registry for data contribution by a number of selected banks
December ’14
• Open KYC Registry for data contribution and consultation by all banks
• Commercial launch of KYC Registry
Bootstrap Controlled ramp-up
General availability
Timeline The journey starts today
37
Q&A
?
Thank you
38