What is sanctions governance in AML?

Sanctions governance in the context of anti-money laundering (AML) refers to the management of compliance with sanctions imposed by regulatory bodies. This involves ensuring that an organization adheres to the laws and regulations related to economic and trade sanctions, which may include restrictions on doing business with certain individuals, entities, or countries.

Effective sanctions governance is a crucial aspect of a comprehensive compliance program, as it helps organizations prevent legal and financial repercussions that could arise from inadvertently engaging in transactions with sanctioned parties. This includes implementing robust screening processes to identify and filter out sanctioned entities within customer databases, transaction monitoring, and regularly updating compliance programs in response to changes in sanctions lists.

Overall, sanctions governance requires a thorough understanding of the regulatory landscape and proactive measures to align business practices with legal obligations, ensuring that the organization operates within the boundaries set by governing bodies.