2 Common Methods for Screening Financial Institutions

As a consequence of the recent coordinated decision made by the European Union, the US, the UK and allies to revoke the access of many Russian banks to SWIFT, firms need to ensure effective screening of counterparty banks subject to sanctions.

What is a Business Identifier Code (BIC)?

Business Identifier Codes (BICs) are used by financial and non-financial institutions as an international identifier to facilitate automated processing of information. For instance, BICs are the primary means of identification for financial institutions on the SWIFT network, where the core of international transactions is processed. They contain a country code which is relevant for embargo screening.

Unlike other identifiers, BICs are global in nature. It makes them particularly effective to identify matches against sanctioned organizations or discard potential hits resulting from matching names alone.

How to Screen Sanctioned BICs?

Firms need to ensure they are complying with the latest sanctions regimes against Russia. In accordance with the Guiding principles for screening ISO 20022 payments published by SWIFT, there are 2 methods commonly applied by the industry to screen a BIC:

  1. Matching the BIC against list of sanctioned BICs and the BIC country code against Embargo data. This is the most effective and efficient method but requires lists that are enriched with BICs.
  2. Converting the BIC into its Name and Address using a SWIFTRef product, then matching the Name and Address against sanctioned Entity and Embargo data. This method is the fallback option and provides a compensating control for when a BIC has not yet been identified, or for when the lists are not enriched with BICs but generate more false positives.

Watch Screena in Action

In this short video tutorial, find out how practically Screena API helps to identify sanctioned banks in accordance with either method.

Tutorial - Screening Financial Institutions

You can download the two json requests posted in the tutorial using this link:

Screening Financial Institutions – JSON Requests.zip