Sanctions Screening

Definition

Sanctions screening is the process of comparing customer, counterparty, and transaction data against official sanctions lists issued by authorities such as the UK Office of Financial Sanctions Implementation (OFSI), the United Nations (UN), the European Union (EU), and the US Office of Foreign Assets Control (OFAC).

The goal is to identify matches to sanctioned individuals, organisations, or countries so that prohibited transactions can be blocked and reported.

Why it matters

Engaging in business with sanctioned parties is a criminal offence in the UK, carrying heavy financial penalties and potential imprisonment.

From May 2025, UK law will require mandatory sanctions screening for high-value transactions (over €10,000), even in sectors previously outside the scope of full AML supervision. This will particularly affect high-value goods dealers, art market participants, and other luxury sector businesses.

How sanctions screening works

1. Identify data points – Collect names, dates of birth, addresses, and company details.
2. Match against sanctions lists – Use screening software or manual checks against updated lists (UK, UN, EU, OFAC, etc.).
3. Investigate potential matches – Confirm whether a flagged record is a true match or a false positive.
4. Freeze assets if required – If a true match is found, immediately freeze any relevant funds or assets.
5. Report to OFSI – Notify the regulator without delay if a match is confirmed.
6. Maintain records – Keep evidence of screening, match resolution, and reports made.

Examples and use cases

• Bank onboarding – Screening a new customer against the OFSI consolidated list.
• Luxury goods sale – Checking a buyer’s name before completing a high-value purchase.
• Export transaction – Verifying that goods are not shipped to a sanctioned country or entity.
• Ongoing compliance – Re-screening existing clients when sanctions lists are updated.

Mini-FAQ

Q: How often should sanctions screening be done?
A: At onboarding, before certain high-value transactions, and on an ongoing basis whenever sanctions lists are updated.

Q: What happens if I find a sanctions match?
A: Freeze the relevant assets immediately, stop the transaction, and report to OFSI. Do not alert the sanctioned party.