Hypothetical
You are a compliance manager in the United States at a major U.S. bank that operates internationally.
A compliance analyst on your team flags a pending $2,500 payment for your review because the payment appears to involve a Specially Designated National (“SDN”), Gaston Tomaghelli.
The pending payment was originally automatically flagged in the bank’s systems as a potential sanctions hit because of the presence of the name “Tomaghelli” in the related payment documentation.
The compliance analyst manually reviewed the flagged pending payment and escalated it to you for further review.
Based on your initial review of the information available, it appears one of the bank’s U.S. customers (the originator) is attempting to send money to Tomaghelli (the beneficiary).
Questions
Do you clear the pending payment and allow it to be processed? Explain why or why not.
What types of U.S. sanctions compliance policies and procedures should the U.S. bank have in place?
If your bank is a major UK bank that frequently operates with U.S. banks and has correspondent and payable-through accounts at major U.S. banks, what types of U.S. sanctions-related compliance policies and procedures should the UK bank have in place (if any)?
What types of ongoing monitoring and due diligence processes should the U.S. bank have in place to mitigate against compliance failures?
What types of contract provisions should the U.S. bank have in its agreements with customers to mitigate against compliance failures and position the bank to terminate payments or customer relationships that become problematic due to sanctions compliance concerns?
