Sanctions Screening
Sanctions screening is the process of verifying that individuals and corporate entities are not included on official sanctions lists published by authorities to restrict business activities with certain countries, organizations, or persons.
Watchlist screening, compliance screening
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Examples
The bank screens all new clients against UN, OFAC, and other sanctions lists before establishing a relationship. Furthermore, when onboarding legal entities, the bank will look at its ownership structure to determine all beneficial owners and check whether they are under sanctions. In some jurisdictions, if more than 50% of the entity is owned by persons who are under sanctions, the legal entity itself is considered as being under sanctions. Banks may also utilise third-party KYC vendors to aggregate many different sanctions lists in order to streamline the screening process.
FAQ
What are the major sanctions lists that banks use for screening?
Key lists include OFAC, UN, EU, and HMT sanctions, which restrict dealings with listed individuals, companies and countries.
How often should banks screen against sanctions lists?
Screening should be done during onboarding and regularly thereafter, often daily, to capture any updates to sanctions lists.
What happens if there is a potential match against a sanctions list?
Potential matches must be investigated and escalated. If a true match, the bank cannot do business with the sanctioned party.
