What is a watch list and how does it relate to KYC?
Under Section 326 of the Patriot Act, financial institutions are now required, in connection with their CIP, to “…consult a government list to check the customers name against a list of known risk entities, which list should include the list published by the Office of Foreign Assets Control (“OFAC”) in accordance with OFAC regulations; although not required by law, IPSA believes all institutions should consult an aggregated list of several individuals lists of known or suspected terrorists or terrorist organizations, money launderers, fraudsters, and politically-exposed persons…” There are numerous watch lists available for screening and consultation that are published by both governmental agencies as well as a variety of private companies and organizations. Several private companies offer commercially a variety of aggregated watch lists which contain literally hundreds of thousands of names of known or suspected terrorists, money launderers, narcotics traffickers, fraudsters, arms
