OFAC/SDN Watchlist Software Application Axiom #2

31 Jan 2008 by Chetan Shah.

While parsing the OFAC SDN list provided by US Treasury, the alerts should be generated at the main entity level.

SDN list consists of a parent entity. The child/ren of this parent entity are the “AKAs” by which the organization or an individual is also known.

For example :

6365
Usama bin Muhammad bin Awad
BIN LADIN
Individual

SDT
SDGT

4227
a.k.a.
strong
BIN LADIN
Usama

4757
a.k.a.
strong
BIN LADEN
Usama

4771
a.k.a.
strong
BIN LADEN
Osama

4772
a.k.a.
strong
BIN LADIN
Osama

4773
a.k.a.
strong
BIN LADIN
Osama bin Muhammad bin Awad

If alerts are generated at a child level, possibly the system will generate more alerts or duplicate alerts. For large financial institutions this can create a lot of unnecessary work loads for Risk Analysts. This in turn creates a backlog of alerts to be looked at. Having backlogs of alerts creates a major financial/reputation risk for the institution as there may be a bad guy on their books but they could not take action in time because of them being severely backlogged on their alerts processing.

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