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Sanctions Screening

Sanctions Screening

Sanction lists are growing daily and sanctions published by the multiple different issuing bodies don’t always align. Coupled with this, the definition of sanctions is broadening and is becoming more open to interpretation, making it more difficult than ever for businesses to effectively identify and manage sanctions risk.

All businesses in all sectors are obliged to comply with sanctions screening requirements, and therefore need to have adequate controls in place. Historically, enforcement actions have been more prominent in Financial Services, but other sectors have also received significant fines and some regulatory bodies are increasingly turning their attention to other industries. For example, the Office of Financial Sanctions Implementation (OFSI) has published financial sanctions guidance for charities and non-governmental organisations. Failure to comply with sanctions or obtain the correct licence, in the case of export controls, can lead to significant fines. In 2019, U.S. OFAC’s enforcement penalties alone hit a record U.S. $1.2 billion.

It’s not just customers who present sanctions risk…

Enforcement agencies can levy fines not just for sanctions violations, but also failure to have adequate controls in place. This means firms must ensure that they carry out effective sanctions screening, not only on direct third parties, but also their associates, beneficial owners and the extended supply chain, particularly in geographies known to have strong links to sanctioned countries.

HM Treasury Sanctions List

The UK consolidated list of financial sanctions targets applies to:

  • all individuals and legal entities who are within or undertake activities within the UK’s territory

  • all UK nationals and legal entities established under UK law, including their branches (irrespective of where their activities take place)

Office for Financial Sanctions Implementation (OFSI) is responsible for ensuring UK sanctions are implemented and enforced.

UN Sanctions

The United Nations Security Council sanctions list applies to:

OFAC Sanctions List

The specially designated nationals and blocked persons list (SDN) applies to:

  • all US citizens, wherever they are in the world
  • corporate entities constituted in the US
  • any entity that:
    • trades in US dollars
    • uses US goods or components
    • has a US parent, subsidiary or affiliate
    • and/or work through a local agent or supplier with a US connection

EU Consolidated List of Sanctions

The EU consolidated list of sanctions applies to:

  • all EU citizens, wherever they are located in the world
  • corporate entities constituted in a member state