3. Financial Institutions’ Mechanism to Verify all Customers Against the Listed Names of the Security Council
| No: 391000077627 | Date(g): 25/3/2018 | Date(h): 9/7/1439 | Status: Modified |
Translated Document
Effective from 2018-03-25 - Mar 24 2018
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| 3.1 | Financial institutions must conduct daily and continuous checks of customer databases and any information obtained regarding potential or existing customers. They must compare this information with the names included in the Security Council lists related to the prevention of the proliferation of WMD and their financing. Financial institutions are tasked with determining whether they are in possession or under their management of any funds subject to Security Council resolutions. An up-to-date list of individuals and entities on these lists must be maintained in the database. | ||
| 3.2 | Certain financial institutions utilize electronic service programs to ensure that their clients are not subject to any sanctions linked to the Security Council lists related to the prevention of the proliferation of WMD and their financing. While electronic services are valuable tools, they should not be relied upon as foolproof guarantees of compliance with imposed procedures. Daily and continuous verification must be conducted to compare the names listed by the Security Council sanctions committees. The basis for tracking updates and ensuring the enforcement of sanctions imposed on individuals listed in Security Council lists remains the website mentioned in paragraph (1.3) above. | ||
| 3.3 | When a financial institution identifies funds in its possession or under its management that must be frozen, it is required to take the following actions: | ||
| a– | Without delay (within hours), the financial institution must immediately freeze all such funds and any funds derived or resulting from them, without prior warning. | ||
| b– | Abstain from offering any financial or other services or providing funds to or for the benefit of any listed person, group, or entity. This prohibition covers all types of services provided to the listed person, group, or entity, including but not limited to opening accounts or offering any form of advice, financial services, brokerage and investment services, or any type of assets or property, directly or indirectly, whether physical or non-physical, tangible or intangible, movable or immovable. | ||
| c– | In the event of a freeze, SAMA must be notified within a maximum of five working days from the date of the freeze being imposed. This notification should include information about the status of the funds, any measures taken regarding them, the nature and quantity of the frozen funds, and any other relevant information that may facilitate compliance with the decisions. Financial institutions shall ensure the accuracy of the information provided to SAMA. | ||
| 3.4 | If a financial institution is not found to be in possession or control of any targeted funds, it must promptly notify SAMA of any transactions carried out with a former or transient client who is later identified as a person, group, or entity listed on the Security Council's lists. Furthermore, the institution must immediately inform SAMA of any attempted transactions involving individuals listed on the Security Council's lists.* | ||
| 3.5 | Financial institutions, in the event of name similarity, are required to immediately search using available system resources for information to confirm whether the name matches or not. If the financial institutions fail to obtain information confirming the match, SAMA must be notified immediately without taking any further action. | ||
Paragraph (3.4) has been amended in accordance with Circular No. (486/130885) dated 04/09/1440H, corresponding to 09/05/2019G.