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The Wolfsberg Group. Due diligence required by global and regional financial institutions

The Wolfsberg Group is an association of thirteen global banks which came together in October 2000 aiming to develop frameworks and guidance for the management of financial crime risks, particularly with respect to Know Your Customer, Anti-Money Laundering and Counter Terrorist Financing policies. The Wolfsberg Group consists of the following financial institutions: Banco Santander, Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan Chase, MUFG Bank, Société Générale, Standard Chartered Bank and UBS.
 
On March 27, 2019 The Wolfsberg Group, the International Chamber of Commerce (ICC) and BAFT jointly announced the publication of appendices to its 2017 Trade Finance Principles guidance document. The document addresses the due diligence required by global and regional financial institutions of all sizes in the financing of international trade and will now feature information on open account trade and financial institutions’ trade loans.
 
The appendices provide guidance on the specific application of controls by banks in the context of open account trade transactions and specifically elaborate on receivables purchase techniques as defined by the Global Supply Chain Finance Forum. They also provide guidance on the application of controls by banks in the context of Financial Institutions Trade Loans (FITL), also called Bank-to-Bank Trade Loans. More information can be found at  https://www.wolfsberg-principles.com/sites/default/files/wb/Trade%20Finance%20Principles%202019.pdf
 
Earlier, in January 2019, the Wolfsberg Group issued the Guidance on Sanctions Screening (the Guidance). Sanctions screening is a control employed within Financial Institutions (FIs) to detect, prevent and manage sanctions risk. Screening should be undertaken as part of an effective Financial Crime Compliance (FCC) programme, to assist with the identification of sanctioned individuals and organisations, as well as the illegal activity to which FIs may be exposed. It helps identify areas of potential sanctions concern and assists in making appropriately compliant risk decisions.
 
The fundamentals of the guidance are derived from legal/regulatory requirements, as well as expectations and global industry best practice. It is not intended to suggest all FIs should apply all elements in this guidance to the same level; rather, it attempts to demonstrate where sanctions screening can be an effective part of a wider sanctions compliance programme, where it has limitations as a control and where a risk based approach is appropriate. The guidance includes sections on the definition of sanctions screening, the fundamental elements of a sanctions screening programme, consideration of a risk based approach, technology, alert generation and handling, reference data, transaction screening, list management and lookbacks.
 
Source: https://www.wolfsberg-principles.com/articles/publication-guidance-sanctions-screening
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