Rules for the Implementation of Targeted Financial Sanctions

The Financial Institution shall test the effectiveness of internal policies, procedures, and controls related to the implementation of the obligations contained in the Rules through an independent auditor, whether through internal or external review, on an annual basis, and the results shall be submitted to the board of directors or senior management, as the case may be, for discussion and to take the necessary measures to address any deficiencies. 2.7 The Financial Institution shall establish a specialized unit for Targeted Financial Sanctions that is organizationally linked to its anti-money laundering and counter-terrorist financing AML/CFT unit, and shall provide sufficient human and technical resources to the specialized unit commensurate with the nature of its activities, the scale of its operations, and its level of exposure to risks, and shall appoint an officer with adequate professional competence and experience to undertake the unit's tasks. A Non-bank Financial Institutions may, after obtaining written non-objection from SAMA, assign the anti-money laundering and counter-terrorist financing officer to this role, provided that the officer possesses the required competence and experience in Targeted Financial Sanctions and is granted the necessary powers to perform the assigned tasks. Chapter Three: Screening Procedures and Controls 3.1 The Financial Institution shall establish written procedures and controls for the immediate and direct screening of customer information and data, transactions, beneficial owners, directors, and authorized signatories on behalf of customers, and other related parties, to determine whether they match the sanctions lists and to ensure that the requirements set forth therein are implemented in accordance with the Rules. 3.2 The Financial Institution shall have written and updated procedures to identify relationships that may indirectly involve listed persons, and a mechanism to deal with such cases in a manner that ensures the Financial Institution's compliance with the requirements set forth in the Rules and instructions related to Targeted Financial Sanctions. This includes, without limitation, identifying entities that are wholly or partially owned, held, or otherwise directly or indirectly controlled, by a person listed on the sanctions lists, and may include preventive measures to mitigate risks; reviewing ownership structures, conducting additional measures to verify ownership or control, and implementing enhanced due diligence measures on legal person structures. 3.3 The Financial Institution shall have written procedures and clear, up-to-date indicators to identify situations that may give rise to attempts to circumvent or evade Targeted Financial Sanctions, including monitoring such situations and adopting and implementing a mechanism to deal with them in a manner that ensures the Financial Institution's compliance with the requirements set out in the Rules.