Step 5: Sanctions Screening Pre-Approval
The Source Bank, Destination Bank and Liquidity Providers will screen the sender and recipient
All cross-border payments must be screened against sanctions lists to ensure the payments are not financing terrorism, drug trafficking or other illicit activities. Screening is the responsibility of the banks involved in the payment (specifically the Source Bank, Source Liquidity Provider, Destination Liquidity Provider and Destination Bank). Nexus does not perform screening itself, but it does provide an API that allows these banks to communicate with each other so that they can approve (or reject) the proposed payment before the payment instruction is made. The aim is to undertake sanctions screening before any funds are moved (in either the Source or Destination IPS) and to resolve any alerts or matches against the sanctions list without human intervention, wherever possible.
The process of sanctions screening is described in detail in Chapter 7, so this section outlines the communication and message flows between the various banks involved in sanctions screening.
The process is as follows:
- 1.The Source Bank constructs a payment message which includes all the data that would be in the final payment instruction. The payment message includes:
- all the necessary information required by FATF Guidelines on the Sender, specifically
- The Sender’s name
- The Sender’s account number
- At least one of the Sender’s:
- Postal address
- Date and place of birth
- National identity number or another unique identifier
- the Recipient’s account number
- the Recipient’s name:
- If the Confirmation of Payee processes returned the real full name of the Recipient, then this data should be used
- Otherwise, the Source Bank will use the Recipient name entered by the Sender (although this may not be entirely accurate)
- 2.The Source Bank sends the message to the Source Gateway’s API (1).
- 3.The message is forwarded to:
- 1.The Liquidity Providers (based on the quote ID provided) (2 & 3)
- 2.The Destination Bank (4)
- 4.In parallel:
- 1.The Destination Bank uses this information to undertake sanctions screening on the Sender, against the sanctions lists applicable in their jurisdiction.
- 2.The Source Bank undertakes sanctions screening on the recipient, against the sanctions lists applicable in their jurisdiction.
- 3.The Source and Destination Liquidity Providers undertake sanctions screening on both the Sender and the Recipient, against the sanctions lists applicable in their jurisdiction.
- 5.If no bank’s screening triggers an alert, each bank responds with their approval of the Proposed Payment and the payment can proceed.
- 6.If any bank’s screening triggers an alert, they can either:
- 1.Respond with a list of additional information it would require in the final payment instruction to be able to reject a false match, or
- 2.Use the Request-for-Information API below to immediately request further information, before responding with a final decision.
- 7.If any bank responds to say that further information is required, the Source Bank should attach that further information to the final payment instruction (explained in next section).