What is Sanctions Screening?

In an international age of business, where cross-border payments are common and employers have workers, clients, and suppliers all across the world – it can be challenging to monitor everybody you do business with. Transact with the wrong person or business and you could find yourself at the risk of criminal prosecution.

What is Sanctions Screening?

Sanctions Screening is a financial security mechanism which makes sure you don’t unwittingly jeopardise your business through criminal action. It does this in two ways:

• Keeps you safe, by preventing you from unwittingly doing business with individuals and organisations who have been added to any of the 1000+ official sanctions lists. Anybody on these lists has been involved in illegal activity – typically money laundering, terrorist activity, or human rights violations.
• Keeps you on the right side of the law, by complying with regulations and legal requirements. Even if you work with a person or business from a sanctions list accidentally, the ramifications for you can be severe.

There are businesses of all shapes and sizes on sanctions lists. What might have once been a major threat confined to big international organisations, is now an everyday risk for entrepreneurs, local businesses, and domestic companies too. The only way to make sure you don’t fall foul of sanctions regulations is to use sanctions screening for every payment.

What is the UK financial sanctions list?

The UK Sanctions List, published by the government, is one of the most important documents for UK companies to assess their dealings by. With thousands of businesses and individuals listed, and regularly updated, it contains every single entity currently under sanctions by the UK government – from all over the world.

Financial sanctions can be imposed on entire countries, including all of its citizens, or on specific people or businesses.

On an international level, the objective is often to coerce or constrain a regime – like in the case of Iraq during the Second Gulf War. These can be instigated by the UK Government or the United Nations. PEPs, or Politically Exposed Persons, also fall into this area.

On a national level, the objective is often more localised. Sanctions generally aim to prevent a person or business, whether they’re based in the UK or not, from doing business with UK companies. This can be because they’re part of a wider United Nations sanctions list, or because they’ve committed crimes within the UK.

In both cases, sanctions aim to protect the UK economy and its businesses from the threat of criminals in business and finance.

If a person or business is on the UK sanctions list, the law prevents you from sending them (or receiving from them) funds – even if for legitimate and legal reasons – or dealing with any of their economic resources. You must not transact with them on any level, or commit any acts that can be deemed to support them financially or economically. With strict rules and severe penalties, sanctions screening is an essential first line of defence to avoid being implicated in any criminal activity.

How does sanctions screening work?

The UK Sanctions List, published by the government, is one of the most important documents for UK companies to assess their dealings with new or existing partners and customers. Every business in the UK must abide by sanctions regulations, regardless of shape, size, or sector.

The UK Sanctions List is one of more than 1000 official sanctions lists that our Sanctions Screening feature uses, when checking the details of your customers, suppliers, or partners. Unlike some bank portals, the service covers a wide range of payment types, including BACS, Faster Payments, CHAPS, Direct Debits, SWIFT & SEPA.

Sanctions Screening generally happens twice: at onboarding and at transaction. When you’re bringing a new supplier on board, you put them through screening checks which compares their personal details with those registered on sanctions lists. The same checks are made before a transaction, as a double-check mechanism but also to ensure that your supplier hasn’t been added to a sanctions list since you onboarded them.

Sanctions screening checks several data points, in order to catch those who mask their identities. If any matches are found, either at onboarding or at transaction, the connection will be flagged and the process paused for manual intervention.

Explore AccessPay’s Sanctions Screening tool.

Benefits of Sanctions Screening

Besides keeping your company safe from criminals and in line with the regulators, Sanctions Screening comes with a host of operational benefits:

• Save time

By avoiding the need for manual verification, which is common for organisations whose banks cannot perform full checks for all payment types, you will claim time and resource back for other business-critical tasks.

• Reduce risk

By performing sanctions checks directly within your payment operations, you reduce the risk of human error via manual checks, and reduce the number of high-risk users accessing sensitive financial data.

• Save money

By consolidating your fraud and error prevention methods into your payment operations, you reduce the need for additional layers of security, and subsequently keep your third-party costs down.

Fraud & Error Prevention Suite

Sanctions Screening is just one of several features, including Payment Screening and Confirmation of Payee, that make up AccessPay’s full-service Fraud & Error Prevention Suite. To protect yourself from doing business with clients and suppliers under sanctions, whilst staying on the right side of the regulators, find out more about the Fraud & Error Prevention Suite.