FFIs face new requirements to screen for Hezbollah connections


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Financial constriction of terrorists has been a key tool of the Obama Administration, and a new federal law in the U.S. has trained those tools on Hezbollah and financial institutions that serve that organization.

The Hezbollah International Financing Act of 2015, passed late in 2015, requires foreign financial institutions doing business in the U.S. to refrain from providing financial services or money-laundering aid to the organization and its front companies. FFIs that are found to providing banking services to Hezbollah can expect to face stiff sanctions.

According to the Wall Street Journal, this will require prioritizing due diligence efforts and screening for Hezbollah ties, and that will likely require assiduous attention from financial institutions given Hezbollah’s extensive use of front companies.

The group has been designated as a foreign terror organization by the U.S. State Department, and it is already subject to sanctions. This new law, however, goes further in its efforts to constrict the financial resources of the group.

AML Partners CEO Frank Cummings said these types of sanctions-related efforts by the U.S. seek to constrain terror organizations through economic methods. For FFIs doing business in the U.S., these laws and regulations require the best in AML Compliance thinking and the use of effective software tools.

“Financial institutions are behind the eight-ball in all this use of financial leverage to thwart terrorist groups,” Cummings said. “Having a robust, flexible, and well integrated sanctions-screening and AML system maximizes both effectiveness and efficiency for Compliance efforts. Those are two essential qualities in both AML programs and their software tools when the stakes are this high and the requirements are this complex.”