Sanctions Lists

Sanctions are legal restrictions, usually enforced by government bodies or international authorities. They’re primarily put in place to limit or prevent the trading of individuals, businesses, or even whole nations who have committed (or are associated with) financial crimes. Sanctions play a key role in the global effort to thwart organised crime networks, and consequentially form an important part of the AML process too.

According to the Office of Financial Sanctions Implementation, there are three kinds of financial sanction in the UK. These are: ‘targeted asset freezes’, ‘restrictions on a wide variety of financial markets and services’ and ‘directions to cease all business’.                          

Who is on a sanctions list?

Any individual or entity that has received a sanction will appear on a sanctions list, but relatives and close associates are often featured too. Here are some of the most common offences which warrant a sanction:

• Money laundering

• Terrorism, or terrorism financing

• Human trafficking

• Violating international trade agreements

• Drug trafficking 

• Organised crime         

How do sanctions lists work?

Most governments and financial authorities have their own lists. As a result of this, there are hundreds of different databases all over the world which are dedicated to sanctions. Among the most significant are the UK Consolidated list, the US Specially Designated Nationals and Blocked Persons list, and the United Nations list.

Screening these lists manually for your potential customer or client is both time-consuming and inaccurate, as there are so many lists to check, and matches can often turn out to be false positives. The most efficient, reliable way to carry out sanctions checks is through a specialist provider like SmartSearch. We use the Dow Jones WatchList, which is updated daily and compiled of over 1,100 sanctions lists.

Can you do business with a person or entity on a sanctions list?

It is illegal to have dealings with a person or company who has been sanctioned, if those dealings break the terms of the restrictions which have been put in place. You can occasionally work with an entity or individual who has a sanction if you get a license to do so, but this is highly inadvisable, as it would still pose a significance risk to your firm.

Why are sanctions lists important for AML compliance?

• Carrying out sanctions checks could prevent your firm from unknowingly breaking the law, by entering into business with a person or entity who has a history of financial crimes, like fraud and money laundering.

• These checks protect your company from the risks that a sanctioned individual poses to your reputation, as well as your financial wellbeing.

• Checking your potential client or customer against sanctions lists also assists the government in enforcing these legal restrictions, as it stops any further criminal activity by the sanctioned parties.

How SmartSearch Can Help­­­­­­

Navigating sanctions lists is a complex task. Manually carrying out a thorough screening of your client or customer, whilst factoring in the hundreds of different industry lists available, would be an inefficient use of time – and there’s no guarantee that you’ve covered all bases.

As part of our end-to-end AML service, SmartSearch performs extensive checks using the comprehensive Dow Jones WatchList. This is an exhaustive compilation of over 1,100 international sanctions lists, sourced from governments, financial authorities and even private organisations across the globe. If we do identify a sanction against the individual we’re researching, we automatically carry out Enhanced Due Diligence, to confirm that this is a true match, rather than a false positive.

Choosing SmartSearch to assist your firm with AML compliance is a convenient and cost-efficient way to ensure that your business is always up to date with recent AML regulations.