Description:

Can be used to make direct or indirect payments to a designated or sanctioned target or country.

Appears in:

• Acquisition Leveraged Finance
• Asset Swap
• Basis Swap
• Borrowing Base Facility
• Bridge Loan
• Certificate of Deposit (Broker Acting as Principal)
• Certificate of Deposit (Broker Acting on Behalf of Client)
• Certificate of Deposit (Direct Interaction with Clients)
• Commodity Option
• Commodity Swap
• Constant Maturity Swap (CMS)
• Credit Facility
• Currency Swap
• Deposit
• Deposit (Direct with Client)
• Deposit (via Broker)
• Discounting of Receivables With or Without Recourse
• Documentary Collections (Export)
• Equity Futures
• Equity Option
• Equity Swap
• Exotic FX Option
• Exotic Interest Rate Option
• Exotic Interest Rate Swap
• FX Option
• FX Prime Brokerage (Continuous Linked Settlement)
• FX Prime Brokerage (Non-Continuous Linked Settlement)
• FX Spot
• Import Guarantee (Standby Letter of Credit)
• Index Option
• Inflation Swap
• Interest Rate Swap
• Letter of Credit and Guarantee Syndication
• Leveraged Loan
• Liquidity Support Facility
• Loan Syndication
• Multi-Product Facility
• Option
• Option On Futures
• Overdraft Facility
• Revolving Credit Facility (Bilateral Agreement)
• Revolving Credit Facility (Syndicated)
• Standby Facility
• Swaption
• Term Loan

Addressed by:

• Approval to Make 3rd Party Payment: Compliance approval is required for 3rd party payment and monitoring.
• Bank to Bank Transfers (Low Risk Jurisdictions): Payment can only be made via bank-to-bank transfers from countries with strong AML controls (typically low-risk jurisdictions).
• Early Termination Clause: Legally binding agreements relevant to the service include an early termination clause for high-risk clients or sanctions breaches.
• Event Triggered Payment: Holds no investment value and pays out only upon the occurrence of a specific, verifiable event as determined by the product provider.
• Event Triggered Review: Ongoing monitoring of a business relationship that is triggered by a specific event and includes a view of customer information, risk profile and transactions. Events can include adverse news, a change in status, a change in address, a request for a higher-risk product or service, a change in beneficial ownership or control, a type of business, a move to a higher-risk country, or unusual activity.
• Know Your Business (KYB): Includes taking steps to gain an understanding of a customer's business activities, including the nature of the business to be taken with a bank and the anticipated volume and value of the business.
• Limits on 3rd Party Payments: Restricted capacity to make 3rd party payments.
• Low Risk Multi-Banked Customer: The customer must establish more than one relationship with a firm or another official body (e.g., a regulator) in a low-risk jurisdiction.
• No Transactions Prior to CDD or EDD: Entering into a transaction before completing CDD (Customer Due Diligence) or EDD (Enhanced Due Diligence), as appropriate, is not allowed.
• On-Going Screening: Daily sanctions and adverse press screening, in addition to the risk review cycle.
• Originator and Beneficiary Information: Require that originator and beneficiary information be included in the payment.
• Restricted to Regulated Firm: Restrictions on the types of customers (regulated Financial Institutions) to whom the product can be offered.
• Sanctions Payment Filtering: Screens financial transactions to identify potential matches against international economic and financial sanctions.
• SWIFT Confirmation: Requires confirmation via SWIFT that payment will be used solely for agreed purposes pre-release and post-payment
• Traded on Regulated Exchange: Traded on a regulated exchange in a low-risk jurisdiction.
• Transactional Due Diligence (TDD): Conducts a detailed examination of specific transactions identified as being higher risk.