Sanctions Screening

The process of checking individuals, entities, and transactions against official sanctions lists to identify prohibited counterparties. Key lists include OFAC SDN (US), EU Consolidated List, UN Security Council List, and UK HM Treasury. Sanctions screening is mandatory at onboarding and must be continuous (ongoing monitoring). Violations can result in multi-billion dollar fines.

The major sanctions programs include: OFAC (US) — the SDN (Specially Designated Nationals) list and country-specific programs (Russia, Iran, North Korea, Cuba, Venezuela); EU Consolidated List — assets freeze and travel ban measures; UN Security Council List — multilateral measures binding on all UN members; UK HM Treasury — autonomous UK sanctions post-Brexit (often mirroring but not identical to EU/US). Firms operating internationally must screen against all relevant programs.

Sanctions screening involves two main challenges: false positives (name matching without context) and false negatives (missed matches due to transliteration, aliases, or shell structures). Fuzzy matching algorithms reduce false negatives but increase false positives — compliance teams must manually review alerts. Ownership sanctions (indirect exposure through >50% owned entities) compound the complexity: a non-sanctioned company may still be off-limits if a sanctioned entity owns more than 50%.

For trade finance and supply chain professionals, sanctions screening must extend beyond direct counterparties to include vessels, ports, intermediaries, and end-users. The Russia sanctions (post-2022) have significantly expanded the scope of screening requirements, adding energy, financial, and technology sectors to existing individual and entity lists. SYNTA-IQ's company data helps identify ownership structures that may trigger indirect sanctions exposure.

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