Undertaking screening for negative news, also known as adverse news or adverse media, assists financial institutions to understand the risks posed by existing and prospective customers.
There is no single, universally agreed approach to negative news screening ("NNS") and although adverse media searches are recommended by the U.K's Joint Money Laundering Steering Group guidelines as an Enhanced Due Diligence measure which firms may apply, the way in which the searches should be conducted are not prescribed.
On 11 May 2022, the Wolfsberg Group published useful FAQs on NNS. For the purposes of its FAQs, the Wolfsberg Group has defined negative news broadly as "information available in the public domain which financial institutions would consider relevant to the management of financial crime risk".
There has been a lack of regulatory guidance in this area and the Wolfsberg FAQs will be helpful in plugging this gap.
Financial Institutions should review the FAQs and take into account any recommendations when conducting NNS as part of their risk-based anti-financial crime framework.
If you would like to discuss further, please contact either of the contacts listed, or your usual contact at Hogan Lovells.
Authored by Claire Lipworth.