The United Nations Security Council's consolidated list, or known as the “UNSC list” (United Nations Security Council), is a record of individuals, groups and entities that have been sanctioned by the UN Security Council pursuant to Resolutions adopted under Chapter VII of the Charter of the United Nations. This list aims to prevent and combat the financing of terrorism and other serious international crimes.

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What does the Chapter VII of the Charter of the United Nations?

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Chapter VII of the Charter of the United Nations gives the Security Council the mandate to take measures necessary to maintain or restore international peace and security, including the possibility of imposing sanctions and taking military measures.

Resolutions under Chapter VII can also be adopted in cases of armed conflict, serious human rights violations, war crimes and genocide. In these cases, the Security Council can impose sanctions and coercive measures to restore peace and security.

It is important to highlight that Resolutions are mandatory for all UN member States, and non-compliance with these Resolutions can have serious consequences, such as economic and political sanctions, and even military actions.

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What do financial institutions have to do?

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Obligated individuals, such as financial institutions, companies and regulated professionals, are required to check if the people they do business with appear on this list and take appropriate action if they find a match. This is done to prevent the use of the financial system and other means to facilitate illegal activities, such as money laundering.

The sanctions that apply to those who appear on the consolidated list may vary depending on the applicable UN Security Council Resolution. Sanctions may include freezing financial assets, banning travel and restricting access to certain technologies and services.

Sanctions can also have serious legal and reputational implications for sanctioned individuals or entities, which may affect their ability to do business in the future.

It is important to highlight that non-compliance with the obligations to verify the consolidated list by obliged entities may have legal and regulatory consequences for them, including fines and sanctions.

In short, the consolidated list of the United Nations Security Council is an essential tool in the prevention and fight against money laundering and the financing of terrorism, and its compliance is mandatory for obliged subjects. Applicable sanctions may vary depending on the Resolution, but can have serious consequences for those who are affected by it.

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How was the United Nations created?

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The United Nations (UN) was born in 1945 as a response to the horrors of the Second World War and with the objective of preserving international peace and security with the idea of creating an international organization that would promote cooperation and the peaceful resolution of international conflicts.

The Charter of the United Nations was drafted in 1945 at a conference held in San Francisco, California, and was signed by 50 countries in June of that year. The Charter sets out the principles and objectives of the UN, including the preservation of international peace and security, the promotion of international cooperation in economic, social and cultural matters, and the promotion and protection of human rights.

The UN officially began operating on October 24, 1945, after the Charter was ratified by a majority of the signatories. Currently, the UN has 193 member states and works in a wide range of areas, from the promotion of human rights and social justice to humanitarian aid and international crisis management.

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How to avoid such penalties and fines?

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Financial institutions must control their customer onboarding as well as take the necessary measures to ensure the correct diagnosis in the implementation of their monitoring, in the detection of suspicious transactions and in carrying out due diligence before and during the implementation of financial transactions.

It is an important tool against the fight against terrorism and the prevention of money laundering and is designed to mitigate the international fight.