Sanctions & Lists
What is a sanction? How do I check if my customers are on the sanction lists?
In this guide, we'll look at sanctions and how you can easily keep track of your customers.
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Sanctions - what are they?
Sanctions are means and activities with the goal of compelling actors to change their behavior. They can be imposed on a personal, organizational or national level and can include both political and financial activities.
Financial sanctions are means of cutting off targeted actors from engaging in the financial space in specific countries or regional areas. Common examples include freezing of assets or restricting transactions and trades. In turn, these means puts pressure on a persons, organizations or countrys economy and reputation.
Examples of political sanctions are exclusion from certain unions or international contexts, or ending diplomatic ties with a specific country.
The situation in Europe
As the Ukraine has been invaded by Russia, multiple sanctions from the EU, U.S. and UK have been imposed on Russia, politically and financially.
Sanctions imposed so far include exclusion from sporting events (FIFA World Cup e.g.), freezing of assets for oligarchs and officials, cutting off supplies of certain goods or closing off airspace for Russian flights to name a few. The EU has also excluded 7 Russian banks from SWIFT, the world's leading provider of secure financial messaging services. SWIFT facilitates trillions of dollars of cross-border payments between 11,000 financial institutions in more than 200 countries.
What does that mean for you in practice?
In practice, this means that a number of new individuals and organisations with links to the Russian power elite are now on sanctions lists, a list that is continually being added to as the war continues. As business relationships initiated or continued with entities on these lists are against the law, many companies now need to check these lists against their customer records on a regular basis.
Sanctions Lists - a way of screening your customers
Sanctions lists are lists of individuals, organisations, vessels and other entities subject to sanctions.
The EU, OFAC and the UN, among others, establish sanctions lists that include individuals or organisations associated with money laundering, terrorist financing, corruption and terrorism. Engaging in a business relationship with persons or organisations listed on a sanctions list is strictly prohibited. Furthermore, you must always report to the police if you are contacted by someone on a sanctions list.
A part of the KYC requirements
Screening your customers against sanctions lists, as well as PEP lists and beneficial owners, is part of the customer due diligence or know your customer requirements of the Money Laundering Act.
KYC or Know Your Customer is an important way for your company to avoid risk, save money and stay on the right side of the law. Failure to check your customers and comply with regulations can result in fines, imprisonment and a severely damaged reputation for you and your business.
”With Roarings monitoring service we can continuously update data, which has made the AML process more efficient.”
What to do if you are covered by the Money Laundering Act
As mentioned above, if your company is subject to the Money Laundering Act, you will need to check and screen your customers against sanctions lists. However, in order to know how to deal with any hits on the lists, you need to start with a framework for handling and decision-making.
Risk assessment
Tailor your risk assessment framework, measures and policies to your own business and potential risk. There is no "one size fits all" solution when it comes to risk, so this work needs to be done internally for you specifically.
Data cleansing and sanctions monitoring
It is strongly recommended to regularly check your customer database and their relationships or business involvement to see if they appear on sanctions lists. Use technology and data to support your decisions, with regular data cleanses and monitoring of sanctions lists data being preferable.
How to screen your customers via sanctions lists
Roaring API
Roaring's API for sanctions lists contains consolidated lists from the EU, UN and OFAC. It provides a global coverage on sanctions for comprehensive screening.
If you create a free developer account, you can explore and evaluate the API in our sandbox with test objects.
Roaring Web
Would you rather do manual checks in a user-friendly interface? Then Roaring Web is definitely for you!
Search for a company or person, check against sanctions lists, PEP and more, and then create a report in PDF for downloading, filing or printing!
In the video below you can see how to use Roaring Web easily.
Roaring Monitoring
With Roaring's webhooks, you can easily monitor data about your customers and receive notifications of changes, for example if sanctions are imposed on one of your customers or their relationships.
The webhooks solution also means that you don't have to share your customer register with a third party, but instead match changes against your customer register.
