16 May 2022, 15:37
16 May 2022, 15:37
The United Nations Security Council (UNSC) is one of the six principal organs of the United Nations (UN) and has primary responsibility for the maintenance of international peace and security. It has 15 Members, and each member has one vote. Under the Charter of the United Nations, all Member States of the UN are obligated to comply with the Security Council’s decisions.
The UNSC holds the capacity to take action seeking to maintain or restore international peace and security under Article 41 of Chapter VII of the Charter of the United Nations by imposing sanctioning measures.
The Security Council sanctions regimes focus on supporting the settlement of political conflicts, nuclear non-proliferation, and counterterrorism.
These regimes include measures ranging from comprehensive economic and trade sanctions to more targeted measures such as arms embargoes, travel bans, and restrictions on dealing with certain financial or commodity transactions.
In addition, there are recommendations of the FATF (Financial Action Task Force). This is an inter-governmental body responsible for setting international standards on anti-money laundering (AML) and countering the financing of terrorism (CFT) and proliferation (CPF). Recommendation 6 and 7 (R6/R7) require the implementation of targeted financial sanctions (TFS) to comply with the UN Security Council Resolutions (UNSCRs) relating to the prevention and suppression of terrorism, terrorism and terrorist financing, and proliferation financing.
The term targeted sanctions means that such sanctions are imposed against specific individuals, entities, or groups. The term includes both asset freezing and prohibitions to prevent funds or other assets from being made available, directly or indirectly, for the benefit of individuals, entities, groups, or organizations who are designated according to the UNSCRs and Local Terrorist List.
The Sanction Lists include names of individuals, entities, or groups that the UAE or the UN believe are detrimental to national and/or global peace and security. These individuals, entities, or groups are mostly involved in acts of terrorism, terrorism financing, proliferation financing, and violation of international law.
The purpose of TFS (Targeted Financial Sanctions) is to deny certain individuals, entities, or groups the means to violate international peace and security, support terrorism or finance the proliferation of weapons of mass destruction. To achieve this, it seeks to ensure that no funds or other assets or services of any kind are made available to designated persons for so long as they remain subject to the targeted financial sanctions measures.
The UNSC has a UN Consolidated List of all the sanctioned individuals, entities, or groups designated by the United Nations Sanctions Committees or directly by the UNSC.
In addition to that are mostly country specific lists like the SECO List (Switzerland), the HMRC Treasury List (UK) and The UAE Local Terrorist List (UAE) of all the sanctioned individuals, entities, or groups designated by the UAE Cabinet.
All FIs, DNFBPs, and VASPs must undertake regular and ongoing screening and UN Consolidated List. Screening must be undertaken in the following cases:
The following databases must be included in the screening process:
FIs, DNFBPs, and VASPs are also required to identify, assess, monitor, manage and mitigate terrorist and proliferation financing risks, particularly sanctions-related risks. The internal screening process must take into account such a risk assessment. Where there are higher risks, FIs, DNFBPs, and VASPs should take commensurate measures to manage and mitigate the risks, including applying enhanced screening measures. Correspondingly, where the risks are lower, they should ensure that the screening measures are commensurate with the lower level of risk.
FIs, DNFBPs, and VASPs must ensure full implementation of targeted financial sanctions in any risk scenario.
The freezing measures, including the prohibition of making funds or other assets or services available, apply to:
In cases where an asset is owned or controlled in part or in full by a designated individual, entity, or group and such asset continues to produce benefit (e.g. in the form of dividends or interest) the relevant portion of such benefit is also subject to freezing measures.
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