In a shocking announcement on the 29th of January 2024, recent findings by the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) have brought to light the critical importance of robust and up-to-date sanction screening processes and databases. The announcement designated Iraq-based Al-Huda Bank, an institution with direct access to the US financial system, as a primary money laundering concern.
The FinCEN has proposed to impose special measures against Al-Huda Bank, effectively severing its access to the U.S. financial system, highlighting the need for a real-time updated sanction screening solution as the Bank has seen its status change in a split second. Businesses that use the bank could easily transact on the 28th, and less than 24 hours later, transactions ran through the institution are to be treated as potential money laundering activity.
The evidence gathered by FinCEN demonstrates that Al-Huda Bank served as a significant conduit for financing FTOs, including Iran's Islamic Revolutionary Guard Corps (IRGC) and IRGC-Quds Force (IRGC-QF).
Businesses that are not aware, or use AML solutions that have not been updated to reflect this change could easily run into trouble with compliance authorities.
The Role of Updated AML Sanction List Solution
The Al-Huda Bank case serves as a stark reminder that static or outdated AML sanction lists can expose institutions to risks, which may attract sanctions and fines from compliance authorities.
This is why at Youverify, we prioritise updating our AML Sanction Lists in real time, to account for sudden updates like this. This announcement was made on the 29th of January, and our solution was updated less than 3 hours later to reflect the change (see image below for reference).
A business running checks on the Al-Huda Bank with an AML provider whose AML Sanction List database has not been updated to capture this recent status change will most likely fall prey to AML sanctions due to “lack of proper checks”. However, their only fault is in using the “a lack of updated”.
By investing in cutting-edge sanction screening technologies, financial institutions can not only ensure compliance with regulatory requirements but also contribute to global efforts to combat terrorism financing. The FinCEN announcement is a call to action, urging the financial industry to adopt proactive measures that safeguard against illicit financial activities and protect the integrity of the international financial system. Businesses and financial institutions can also learn how to effectively perform sanction list checks or outsource it to a professional.
As part of this collective effort, Youverify remains committed to providing state-of-the-art AML and real-time update compliance solutions that empower businesses to stay ahead in the ever-changing landscape of financial regulations.
Our suite of compliance tools, including advanced sanction screening, is designed to assist organizations in maintaining the highest standards of financial integrity and security.
See how 750+ global companies use Youverify for AML Sanction list checks and AML screening of customers for compliance and real-time risk detection. Request a demo today.