Sanctions screening software

Sanctions lists name people, companies, vessels and other entities that governments and international bodies have designated. A business that deals with them, directly or through a company they own or control, can breach the law. Screening software makes the check consistent, fast and documented.

• Onboarding screening: checking a new customer or business partner before the relationship starts.
• Payment screening: checking the parties to a payment before it is executed.
• Re-screening: checking the existing customer base again whenever the lists change, so a new designation is caught after onboarding too.
• Ownership and control: looking through a company to the people and companies that own or control it, since sanctions can apply to entities that are not themselves named.
• Beyond people and companies: screening vessels, aircraft, crypto wallets and addresses where the lists name them.
• Evidence: keeping a record of every check, every match and every decision for auditors and supervisors.

1. 1

   Normalise the name

   Case, punctuation, accents and word order are handled so that the same name written differently still compares as the same name.

2. 2

   Match against every known name

   The name is compared with each record's primary name, its aliases and the spellings the source publishes, including names in the original script where the list gives them.

3. 3

   Compare secondary identifiers

   Date of birth, nationality, registration numbers and other identifiers confirm a match or rule it out, which is what keeps false positives down.

4. 4

   Score and threshold

   Each candidate gets a score, and a threshold decides which candidates reach an analyst. A stricter threshold catches more and costs more review time.

5. 5

   Review and decide

   An analyst confirms or clears each match, and the decision and its reason are recorded with the check.

The FATF Recommendations require countries to implement targeted financial sanctions related to terrorism and terrorist financing (Recommendation 6) and to the financing of proliferation of weapons of mass destruction (Recommendation 7): funds and assets of designated persons are to be frozen without delay, and no funds are to be made available to them.

Businesses apply this through the sanctions regimes of the places they operate, such as the UN Security Council lists, the EU's restrictive measures, the US lists administered by OFAC and the UK's financial sanctions administered by OFSI. Some regimes impose civil penalties without proof that a breach was intentional, which is why supervisors expect screening to be systematic and evidenced rather than occasional.

• Coverage: which lists are screened, and is the coverage documented list by list rather than as a single total?
• Freshness: how quickly does a change to a list reach the screening data, and is the existing customer base re-screened when it does?
• Matching quality: how does the tool handle spelling variants, word order, aliases and names written in other scripts?
• False positives: does it use dates of birth, nationalities and identifiers to rule out namesakes, and can the threshold be tuned?
• Explainability: does each match show which list, which record and which name or identifier matched, so an analyst can decide quickly?
• Ownership: can it look through a company to its owners and apply ownership rules such as the OFAC 50 Percent Rule?
• Integration and evidence: a real-time API for onboarding and payments, batch for re-screening, and an audit trail of every check.