Chapter Three: Screening Procedures and Controls

The Financial Institution shall document in its procedures any matching methodology it uses in its screening systems and tools, including the matching logic, the matching mechanism, and the matching criteria, and shall ensure that the methodology is commensurate with the nature of its activities, the scale of its operations, and its level of exposure to risks, and shall periodically and continuously reviews its effectiveness and update it based on the results of the assessment in accordance with the requirements set out in paragraph (3.11). 3.11 The Financial Institution shall document and approve any amendments to its approved screening procedures and mechanisms, including the justifications for the amendments, and shall attach those amendments to the policies and procedures approved by the board of directors or senior management, as applicable, provided that their approval is preceded by the necessary tests to ensure the effectiveness of the amendments made and to ensure that they do not affect the Financial Institution's obligations set out in the rules and instructions related to Targeted Financial Sanctions. 3.12 The Financial Institution shall regularly test the effectiveness of the screening mechanisms to verify their compliance with the requirements set out in the rules and instructions related to Targeted Financial Sanctions, thereby ensuring the accuracy of match detection, reducing cases of incomplete matches, reviewing the filtering criteria used in searches, reviewing scenario-based verification processes, analyzing cases where matches are not detected despite the existence of actual matches, and not limiting the review to name matches only, but also including cases that may arise from indirect matching. These tests, their results, and the actions taken to address any deficiencies discovered shall be documented.