Sanctions Screening Processes

A Sanctions Screening Processes is a crucial step in Anti-Money Laundering (AML) and Know Your Customer (KYC) compliance programs. It helps financial institutions and businesses identify individuals, entities, and countries that are subject to economic or trade restrictions imposed by governments and international regulatory bodies. Conducting sanctions screening ensures businesses do not engage with high-risk individuals or organizations linked to financial crime, terrorism, or illicit activities.

Resonare offers a comprehensive compliance solution to facilitate real-time sanctions screening. Key features include:

  • Automated sanctions list screening to match customer details against global sanctions databases.
  • Real-time alerts for any potential matches to sanctioned entities.
  • Customizable risk-based filtering to assess and categorize risk levels.
  • Integration with regulatory reporting systems to streamline compliance filing.
  • Secure and encrypted record-keeping for audit and regulatory compliance.

Learn about Resonare’s step-by-step approach to sanctions screening

1. Collect Customer Information

Businesses perform Customer Due Diligence (CDD) to collect essential data before conducting a sanctions check. Key details include:

  • Full name and aliases
  • Date of birth
  • Nationality
  • Government-issued identification (passport, national ID)
  • Business affiliations and financial transactions history

Geographic location and country of operation

2. Screen Against Sanctions Lists

After collecting customer information, Resonare’s automated system screens individuals and entities against global sanctions databases, including:

  • S. Office of Foreign Assets Control (OFAC) list
  • United Nations Security Council (UNSC) sanctions list
  • European Union (EU) and UK sanctions lists
  • Financial Action Task Force (FATF) high-risk jurisdiction lists
  • Interpol and global law enforcement watchlists

If a match is found, further investigation is conducted to determine if it is a true positive or a false positive.

3. Verify and Investigate Potential Matches

If an individual or entity appears on a sanctions list, businesses must:

  • Conduct further verification to confirm identity (e.g., checking aliases, date of birth, nationality).
  • Assess the severity and nature of the sanction.
  • Identify any associated individuals or businesses linked to the sanctioned entity.

4. Apply Risk-Based Approach and Enhanced Due Diligence (EDD)

Depending on the level of risk, businesses may implement Enhanced Due Diligence (EDD) measures, such as:

  • Additional identity verification through government and third-party sources.
  • Transaction monitoring to detect suspicious activities.
  • Enhanced scrutiny of business relationships and fund sources.
  • Ongoing monitoring to track any changes in the individual’s or entity’s risk profile.

5. Report Suspicious Activity

If a customer is confirmed as a sanctioned individual or involved in suspicious financial activity, the business must:

  • Restrict or terminate the relationship to comply with regulatory obligations.
  • File a Suspicious Activity Report (SAR) or Suspicious Transaction Report (STR) to relevant regulatory authorities.
  • Maintain compliance records for audits and regulatory inspections.

5. Report Suspicious Activity

If a customer is confirmed as a sanctioned individual or involved in suspicious financial activity, the business must:

  • Restrict or terminate the relationship to comply with regulatory obligations.
  • File a Suspicious Activity Report (SAR) or Suspicious Transaction Report (STR) to relevant regulatory authorities.
  • Maintain compliance records for audits and regulatory inspections.