6.2.6 Sanctions Check

Sanctions Check refers to the process of verifying payment transactions against sanctions lists to ensure that the transaction complies with global regulatory requirements.

Sanctions Check Required option at the Source Network Preference is referred for the Host code, Source code – Source code of the Return transaction, Network code, and Transaction Type as 'Incoming'.

If the option is set as Yes, then the sanction system is picked up from the Sanction System mapping maintenance, Default Sanctions System or Network specific Sanction System.

A Sanctions request XML will be prepared and is sent to the Sanction System. A record is logged in to the Sanction Queue. The request is in Sanction Queue till the final response (Accept or Reject or Seizure) is received.

Based on the response from the sanctions system, the below processing is done:

  • Approved
    • If the response is received on the same day, then the Sanctions Check the status of the Return transaction is updated as Approved and the processing continues.
    • If the response is received on a later date, then the Return transaction activation date is updated as the current branch date.
  • Rejected
    • The return transaction will be retained in the Sanction Check Queue with Rejected status for the user to manually cancel the Return transaction even if auto-cancel is enabled.
  • Seized
    • If seizure accounting is applicable for the transaction, then the following accounting entries are passed.

      Table 6-49 Accounting Entries

      Event Dr/Cr Account Account Type Account Tag
      SRDZ Dr Customer Account Account Return Settlement Amount in account currency
      SRDZ Cr Intermediary GL GL Return Settlement Amount
      SRCZ Dr Intermediary GL GL Return Settlement Amount
      SRCZ Cr Seizure GL GL Return Settlement Amount
    • Both original transaction status and return transaction status are updated as Seized. No further processing or messaging is applicable for Seized transactions.

Note:

SC Ring-Fencing is done on CBPRPlus and TARGET2 ISO for the outbound Payment Settled Return (pacs.004) transactions.

Parent topic: Outbound Return Processing