Sanctions Screening
Checking customers and payments against government and international sanctions lists to prevent dealing with prohibited people, entities or jurisdictions.
Definition
Sanctions screening compares customer identities, and sometimes counterparties to payments, against lists of individuals, entities and countries subject to financial sanctions issued by bodies such as the United Nations, the EU, the UK and the US. Unlike much of AML, sanctions compliance is generally strict-liability: dealing with a listed party can be an offence regardless of intent, so screening runs at onboarding and continuously as lists change. Because names rarely match perfectly, screening uses fuzzy matching that produces potential hits which analysts must review and clear or escalate. Screening is frequently bundled with checks for politically exposed persons.
Worked example
During onboarding an operator's system flags a possible match between a new customer and a sanctioned individual; an analyst reviews identifiers such as date of birth to confirm or dismiss the match before allowing play.
Why it matters
For learners it distinguishes strict-liability sanctions rules from risk-based AML. For professionals, sanctions breaches can bring severe penalties, so screening coverage and match-handling are high-stakes controls.