Sanctions screening for logistics companies and freight forwarders

• Many parties per shipment: shipper, consignee, notify party, end user, agent and carrier are separate legal persons, and a clean consignee does not make the end user clean.
• Transport is targeted too: some sanctions measures prohibit transporting certain goods or providing related services, not only selling them.
• Ownership behind the counterparty: a newly formed trading company is not a red flag on its own, but who owns it can be, and that is rarely on the paperwork.
• Transhipment and diversion: goods routed through a permissive jurisdiction to reach a restricted one are a long-standing evasion pattern.
• Agents and partners abroad: overseas agents and partner networks act in the company's name in places where it has little visibility.
• Booking speed: forwarders quote and book quickly, and a check that takes too long gets skipped.

1. 1

   Capture the parties at booking

   Shipper, consignee, notify party, end user, agents and the paying party, recorded as structured data rather than free text on a document.

2. 2

   Screen the parties and their owners

   Sanctions and PEP screening of each party, and ownership screening of the companies behind regular customers and agents.

3. 3

   Hold before moving

   Screen before space is booked or goods are released, and hold the shipment while a possible match is reviewed.

4. 4

   Monitor regular customers and agents

   Re-screen the customer and agent base when lists change, because a regular shipper can be designated between bookings.

5. 5

   Record and escalate

   Keep the evidence of every check and decision, and pass true matches and export control questions to the people who decide.

Logistics companies, freight forwarders and customs brokers are generally not obliged entities under anti-money laundering law. Sanctions law applies regardless: a company that moves goods for a designated party, or provides services that sanctions prohibit, can breach sanctions even though it never owns the goods.

Sanctions are applied through UN Security Council measures, the EU's restrictive measures, the US programmes administered by OFAC and the UK's financial sanctions administered by OFSI. Several regimes go beyond named parties and restrict the import, export or transport of particular goods to or from particular places, and the services connected with them. Under the OFAC 50 Percent Rule, a company owned by blocked persons can be blocked without being named on a list.

Export controls on dual-use and military goods are a separate regime, with their own lists, licences and end-use checks. Screening a party against a list does not replace them. on8.ai screening also covers US export-control and debarment lists, including the Consolidated Screening List with the BIS Entity List, the BIS Denied Persons List and ITAR debarments, and the Japanese and Taiwanese end-user lists. It holds no UK or EU export-control list, and classification, licensing and end-use checks remain the firm's own. The FATF has also published guidance on trade-based money laundering, in which mis-invoiced or misdescribed shipments are used to move value.

• Real-time API: screening that sits in the booking flow without holding up a quote.
• Every party in one go: all the named parties on a shipment screened together, with each result kept apart.
• Fuzzy matching: consignee and shipper names arrive in many spellings, transliterations and trading names, and the matcher has to handle them.
• Ownership screening: regular customers and agents looked through to their owners, with ownership rules such as the OFAC 50 Percent Rule applied.
• Batch and monitoring: the customer and agent base re-screened when lists change, with alerts only on changes.
• Clear scope: know which sanctions and export-control lists are covered, and which national lists still need a separate check.
• Evidence: every check and decision recorded in a form a customs authority, bank or auditor can follow.