AML screening of a transaction counterparty is the process of checking the individuals and legal entities involved in a transaction against sanctions lists, watchlists, and public and proprietary databases.

AML screening checks are performed in real time in order to identify and flag high-risk or illicit transactions associated with PEPs, sanctioned entities, or adverse media before they are completed.

How transaction counterparty AML screening works

Transaction counterparty AML screening utilizes the existing features of the Sumsub's AML Screening and Monitoring solution, and applies to individuals (transaction beneficiaries) and legal entities (financial service providers).

Sumsub’s AI-powered checks include the detection of suspicious words within the payment details, and the name and counterparty institution screening.

AI-powered checks, combined with our Case Management System (CMS), enhance your compliance team operational efficiency, and help reduce the risks associated with the manual processing of cases.

The following checks are performed during AML screening of transaction counterparties:

Get started with transaction counterparty AML screening

Step 1: Test system behavior

To test the system behavior during transaction counterparty AML screening:

1. In the Dashboard, open the Rules Library page and install the AML Watchlist bundle.
2. Create a transaction using John Snow as a counterparty. This will create a test AML case pre-populated with the respective data.

Step 2: Configure transaction counterparty AML screening

Once you are satisfied with the testing results, you can configure the transaction counterparty AML screening process:

1. In the Dashboard, open the Rules Library page and install the rules triggering the AML checks and related actions. The minimum set of rules includes the following, depending on your business activities to ensure that your transactions are checked and the risky ones (containing potential or true positive matches) are put on hold or rejected automatically:
   • Travel Rule: Counterparty AML Screening
   • Travel Rule: Counterparty AML Screening - Hits to review
   • Check counterparty for AML (sanctions, peps, etc.)
   • Counterparty with potential AML hit
2. Go to the AML Screening settings page.
3. Select a provider that you want to use for AML screening. If the provider is locked, enter your credentials, as described in Comply Advantage and World-Check One.
4. Select a search configuration. You can search by the warning types or by providing a search profile identifier:
   • When searching by the warning types, specify the categories of PEPs for which you want to screen your applicants and add the associated types of adverse media.
   • When searching by custom search profiles, enter a profile identifier. To search for profiles from your Comply Advantage key, make sure to provide the key, as described in this article.
5. Configure name-matching criteria and desired fuzzy-matching levels:
   • Strict matching — to flag applicants only upon an exact match.
   • Default matching — to allow for variations in spelling.
   • Fuzzy matching — to allow for variations in the range of names.
6. Save your changes.

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Note

The AML screening process may require installing rules with the paid features that involve services rendered at an additional price.

Step 3: Review transaction counterparty screening results

Once your setup is complete, you can manage alerts and outputs in Case Management under Transactions and AML cases.

In situations where potential and true positive matches are found during AML screening, the transaction will be treated as set by your rules. Normally, the applicant will be put on hold and sent for manual processing to your compliance officers. The screening results are interpreted, as described in this article.

You can sort the assigned cases by the match source using AND and OR operators, and use the information from these cases for reporting purposes.

To process your cases, follow the instructions provided in this article.