Organizations such as financial institutions need to know and recognize the risks of the people or institutions they cooperate with. Identifying these risks reduces the risks of money laundering and terrorist financing that may occur in institutions. Institutions apply Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) procedures to determine their customers' risks and the institutions they collaborate with. Loc al and global regulators have also proposed these practices.
The risks of every customer or institution cannot be the same, and the risks of some people are higher, for example, Political Exposed People, these people are called PEP for short, and they carry more risks for the institutions they collaborate with, organizations should conduct a wider investigation to determine the risks of these people. This extensive risk analysis is possible with Enhanced Due Diligence (EDD). Special interest persons (SIPs) or special interest entities (SIEs), just like PEPs, also pose high risks to organizations, and organizations need to identify SIPs and SIEs.
What Are Special Interest Persons (SIPs)?
As we mentioned, Special interest persons (SIPs) have high risks, just like PEPs. There are certain reasons why these people are in the high-risk category. The most important reason for these risks to occur should be that these people are involved in a crime, and any suspicious activity has been found before. They may be involved in court proceedings, have a previous criminal allegation, or have previously been involved in financial crimes such as money laundering and terrorist financing. Organizations need to identify these people because they inevitably put them at greater risk of money laundering.
How to Identity SIPs?
SIPs are mostly noticed in Adverse Media, and PEP Sanction screening. Organizations discover these scans while performing applications such as Customer Due Diligence and Enhanced Due Diligence. As a result, SIPs can be recognized thanks to the data these advanced applications use. SIPs recognized afterward are considered high risk by institutions. There are some situations in which these situations occur when people are highly likely to be considered SIPs. These situations are:
- illegal goods smuggling
- bribery and corruption crimes
- organized crime
- arms trade
- tax evasion
- financial theft crimes
- money laundering
- fraud
- extortion
-
terrorism and terrorism financing
What Are Special Interest Entities (SIEs)?
SIEs are high-risk organizations that are involved in criminal activities or are suspected of being involved in criminal activities. Before any institution establishes cooperation, it wants to know its partner or the institution it will do business with and to know its risks. If SIEs are spotted, organizations may be anxious when these organizations do business because these institutions have greater risks of money laundering and terrorist financing. For this reason, SIEs should be noticed just like SPIs, and necessary precautions should be taken.
There is no specific list of SIEs and SIPs, but these individuals and organizations can be spotted from Adverse Media, PEP, Sanction data. By identifying SIEs and SIPs, organizations can protect both their financial integrity and reputation. Therefore the definitions of SIEs and SIPs are very important. In addition, SIEs and SIPs are not illegal to do business with the institutions themselves.
Sanction Scanner Solutions?
Sanctions, PEP, and Adverse Media data is growing and changing day by day. Considering that thousands of new news are published every day in the world, it is both impossible and unsafe to scan this data and detect all SIEs and SIPs manually. With Sanction Scanner's Adverse Media, PEP, and Sanction data, you can easily scan your customers and organizations you do business with. So you can identify SIPs and SIEs efficiently. For detailed information, you can contact us and fill the request demo.
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