Processing an illegal transaction could lead to:
- Financial losses: frozen funds, high fines
- Operational risk: bringing discredit in the eyes of your financial counterparts
- Reputation damage: the hardest to measure, but definitely the most destructive
The US Office of Foreign Assets Control (OFAC) administers and enforces economic and trade sanctions against targeted foreign countries, terrorist, and international narcotics traffickers. The OFAC issues a list of Specially Designated Nationals and Blocked Persons, made of thousands of entries (companies, vessels or individuals) for which the US government forbids banks or bank branches located in the USA to trade with. Payment messages involving these accounts should be blocked or the result could lead to high fines and fund forfeitures. This challenge is made more difficult by the rapid growth and overnight changes of the list.
For more information please refer to the official OFAC Web site.
The European Parliament has adopted directives on prevention of the use of the financial system for the purpose of money laundering and terrorist financing.
Please refer to the official European Parliament web site.
The United Nations Security Council established resolutions concerning counter-terrorism.
Please refer to the official United Nations Security Council web site.
The Financial Action Task Force on Money Laundering (FATF), established in 1989, is an inter-governmental body whose purpose is the development and promotion of policies to combat money laundering – the processing of criminal proceeds in order to distinguise their illegal origin.
These policies aim to prevent such proceeds from being utilized in future criminal activities and from affecting legitimate economic activities. The FATF currently consists of 28 countries and two international organizations.
Its membership includes the major financial centre countries of Europe, North and South America, and Asias. It is a multi-disciplinary body – as is essential in dealing with money laundering – bringing together the policy-making power of legal, financial and law enforcement experts.
For more information please refer to the official FATF/GAFI web site and of European Parliament.