What is sanctions screening?
Sanctions screening is the process of checking clients, beneficial owners and counterparties against official sanctions and watchlists to ensure no prohibited person or entity is involved. Unlike most AML measures, sanctions compliance is absolute: there is no risk-based tolerance and no threshold below which a designated person may be dealt with.
Written by Andréas Hobbelin · Last updated
Which lists apply
- EU consolidated financial sanctions list — directly binding in Spain and Portugal.
- UN Security Council consolidated list.
- National measures and freezing orders.
- OFAC (US) and UK OFSI lists, relevant wherever there is US or UK nexus in the transaction or payment chain.
- Additional watchlists and law-enforcement lists used as risk indicators.
Screening is not a one-off
Lists change frequently, and a client who is clear at onboarding may be designated during a transaction that runs for months. Screening must therefore be repeated — at minimum at key milestones and on list updates — and every screening event should be recorded with its date, the data source and the outcome.
Ownership and control
Sanctions apply not only to named persons but to entities they own or control, commonly assessed at a 50% ownership or a control test. This is why beneficial-ownership mapping and sanctions screening must be done together: screening the front company alone will miss the designated person behind it.
If you find a true match
A confirmed match is not a commercial decision. The transaction must not proceed, assets may need to be frozen and the competent authority must be notified. The internal escalation path should be defined before it is needed, not improvised.
Frequently asked questions
Is sanctions screening risk-based?
No. Risk-based thinking determines how thoroughly you screen and rescreen, but there is no risk appetite for dealing with a designated person — that prohibition is absolute.
How are false positives handled?
By documented match resolution: compare identifiers such as date of birth, nationality and jurisdiction, record the reasoning, and retain the evidence so the decision can be reproduced.
Sources and further reading
Put this into practice
PropComply structures KYC/CDD once per client and shares it securely with the parties in the transaction — each keeping their own independent decision.
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