Canada: Sanctions Notice

What is screened, and how often

The firm screens clients, beneficial owners, signatories, counterparties, borrowers, guarantors, vendors, portfolio companies and the people who direct them. Screening runs before a relationship opens, again whenever a list that binds the Canada entity changes, and across the whole client population every night. Designation changes load into the screening system within 24 hours of publication. Every outbound payment is screened before release, with no threshold below which a payment passes unchecked. Trade finance adds the vessel, its flag, its registered owner and the ports of loading and discharge, and a vessel that changes flag mid-tenor is screened again.

Which measures bind the local entity

Three sets of measures bind an entity: those made in its own jurisdiction, those it adopts from international designations, and those of the currency in which it settles, which across most of the network means the United States dollar.

Canada maintains sanctions under several federal statutes, including country programmes and measures against named individuals, and gives effect to international designations through its own regulations. IGUAKO Capital Canada Inc. screens clients, counterparties, data licensors and the founders of the businesses it covers against the consolidated Canadian list and the group list, and it screens the ownership of every dataset licensed onto the provenance register, because a licence fee paid to a sanctioned licensor is a prohibited dealing. Property found to belong to a listed person is frozen, disclosed without delay to the federal police service, and reported in the periodic return the provincial securities regulator requires, whether that return is nil or positive.

The consolidated group list maintained by the Group Financial Crime function is screened in addition to the local lists everywhere, so a name blocked anywhere in the network is blocked in Toronto as well.

What happens when a name matches

A possible match stops a transaction rather than delaying it. A sanctions officer reviews the alert against identifiers and not against spelling alone. A match confirmed as true is frozen within four hours and reported at once to three named executives. A payment caught by a freeze is not returned to the sender. The freeze is reported by IGUAKO Capital Canada Inc. to the competent authority within the period the local law sets, and Canada freezes join the frozen asset register, which is reconciled monthly against custody statements. Nothing leaves that register without a written release from compliance.

Ownership, licences and testing

A person who is not listed can still be caught by the rules on ownership and control, so the firm aggregates the holdings of listed persons across a structure before deciding whether a counterparty is in scope. Where a licence permits an otherwise prohibited dealing, its conditions are built into the payment system itself, so a payment outside them cannot be released by someone who has read the licence and formed a view. Twice a year the screening thresholds are tested by seeding 200 known names into the population and counting how many the system returns, and the North America desks sit inside that test on the same schedule as every other office.

The firm accepts that this standard costs it business. A counterparty that cannot be screened is not taken on. A structure whose ownership cannot be resolved to natural persons is refused, whatever the return on offer and whoever made the introduction.