The orderly process of customer screening to ensure AML compliance

It is crucial for Designated Non-Financial Business and Professions (DNFBPs) and Virtual Asset Service Providers (VASPs) to implement a rigorous customer screening process to mitigate risks associated with Money Laundering and Financing Terrorism (ML/FT).

DNFBPs and VASPs should follow an orderly process for carrying out customer screening to ensure that relevant legal obligations are met.

The first step involves screening customers against relevant sanction lists to avoid engagement with sanctioned individuals or entities and ensure compliance.

As a second step, DNFBPs and VASPs should conduct a politically exposed person (PEP) screening to identify if customers hold any politically significant position that might pose elevated risks.

After conducting PEP screening, DNFBPs and VASPs should carry out adverse media screening as a final step. Adverse media screening helps ascertain if the customer is associated with any negative publicity or criminal activities reported in the press.

DNFBPs and VASPs must screen customers through social media platforms and the internet to identify any public mentions linking the customer to criminal activities or other reputational risks.

By going through this video, you can understand and implement effective customer screening practices essential for regulatory compliance and risk management.