Sanctions list screening

There are individuals, groups, organizations and companies with whom trade or payments are prohibited. These can be found on the so-called sanctions lists or embargo lists. Anyone on these lists is subject to certain economic or legal penalties imposed by the European Union or other countries.

The aim of a sanctions list check is to carry out checks on all business partners and employees in order to maintain legal transaction security. By looking at the sanctions list, you can find out whether a potential contractual partner is reputable and whether a collaboration will provide the desired security.

In order to carry out a suitable sanctions list check yourself, you must first select the correct list. Subsequently, the check of all business addresses, persons, organizations and companies is mandatory. Failure to carry out the check can result in severe penalties. By supplying goods or paying money to partners and companies on such a list, the management is liable to prosecution.

The purpose of checking the sanctions list is to prevent terror. For this reason, Afghanistan, Belarus, Myanmar, the Central African Republic and the Democratic Republic of the Congo, for example, are on all current lists, which may differ slightly from region to region. As the contents of such a sanctions list include, for example, arms embargoes or financing bans, the potential for cooperation must be reassessed in each sector.

This ensures that you adhere to the legal requirements of your company location and are always well-informed. Regular checks are also helpful for changes to the list, keeping you informed about the suitability of your customers. The subdivision of several check areas, in conjunction with suitable software or an application, makes it easy to keep an eye on all restrictions and guidelines.

In conjunction with the sanctions list check, you can therefore protect yourself functionally and easily identify hits on the list, prevent further business contacts with them and, if necessary, report them directly to the authorities. Based on the obligation to regularly check the sanctions list, it is important to report violations effectively and to have a well-thought-out tool for recording and assessing hits. This is the only way to avoid having your company’s name associated with a breach of the sanctions list principles and having to pay high financial penalties.

If a possible cooperation is pending, the executing company is obliged to carry out an inspection. In principle, there are no exceptions to this rule. Every commercially registered company is obliged to take a look at the sanctions lists in order to safeguard its own activities. However, the audit is not only mandatory for the company’s own transparency, but also for the overall impact and preservation of regional principles.

Due to the wide availability of different lists, you should first determine which lists and collections are important for your business. It is not always necessary to check all lists in advance. In most cases, the basis of the UN sanctions list is only supplemented by the entries for the regionally specific locations in order to meet the requirements. If you opt for a check using Advantage Compliance, the legally required lists as well as the US, UK and Japanese lists are already integrated alongside various others. This means that you do not have to make manual adjustments, but can keep track of your sanctions lists at all times.

The UN sanctions list forms the basis for the review within the registrations. This is published by a government agency and corresponds to the assessments of the UN Security Council. The list is used to identify companies that are already subject to an economic ban and are therefore not allowed to cooperate economically. The reasons for such a ban are often of a potentially terrorist nature, which is why these partners are actively banned from making themselves available.

If the company to be checked is based within the EU, the European sanctions lists must also be checked. A distinction is made here between the person-related and country-related sanctions lists in order to identify individual partners on the one hand and to be able to react to economic bans and embargoes on the other.

Other relevant checks within such a sanctions list may include UK and US registrations. However, attention must be paid here to the different legal bases, as a result of which European law does not automatically become the focus of further recording. Primary transactions with an area of responsibility in the USA or the UK must therefore also be examined in order to obtain qualified statements.

The regular examination of the sanctions lists ensures that changes can be seen at first sight. Therefore, the lists are not only based on a one-off check, but also on the regular recording of the legally up-to-date status. In this way, the aim is to avoid guaranteeing the financing of anti-freedom and anti-democratic forces, which is why it is important to make a specific assessment. Therefore, companies have a responsibility to keep an eye on the lists and to check their own partners regularly.

A violation of the sanctions list is also important for your own financial and operational situation. Thus, the accusation of non-compliance with a court order or a law is in the air, on which you have to justify yourself in court. These can be financial penalties, but also deprivation of liberty measures. It depends on the severity of the breach and the location of your company. On this basis, it will also be a good choice for you to orientate yourself in advance on the registration of the sanctions lists.

If you choose a justice portal, you will not incur any direct costs for you as an entrepreneur. Also, registration or the provision of certificates is not required at this point. The problem, however, is that only Regulation No 881/2002 is being examined. In addition, the input and search are bound to individual addresses, which makes it much more difficult to check several business partners.

An audit in conjunction with software such as Advantage Compliance makes capture much easier. Although you have to reckon with certain costs for the purchase based on the chosen model, the software becomes much more reliable for the test itself. With just a few clicks, you have the overview you want and you can see which companies are already on the list. Both individual addresses and entire test stocks are traced in this way. This way, clarity and transparency with the software are always maintained.

In principle, sanctions are an important detail in the fight against terrorism. For example, the European sanctions list ensures that all appropriate sanctions are applied on the basis of the Iran embargo. This should make it possible to avoid the spread of further injustices and to set a clear focus. The lack of exports to Iran will ensure that the terrorist militias there are unable to equip themselves with additional weapons or to promote injustice in the region by other means.

In this respect, the sanctions lists will become a promotional measure to maintain security within one’s own region and to prevent the spread of terrorism. Since the guidelines and embargoes differ from nation to nation, individual registrations are also necessary accordingly. This is the only way to ensure that companies comply with the economic consequences of their location and ensure the existing arrangements.

Most sanction lists are now made available online. This gives each company access to the collection without incurring additional costs. Thus, any allegations based on the lack of availability of such a list are clearly not legally admissible. Before starting a new business relationship, a clear and structured audit must be carried out in order to react quickly to all possible problems and to avoid the possible payment of penalties.

If you prefer to check the lists manually, this is also possible in principle. Due to the large amount of data and the large number of individual lists, both procurement and monitoring without uniform auditing become very complex. Due to the regular obligation to review, it would be necessary to keep using the new list and to obtain further details. For the sake of simplification, digital control is therefore safer and simpler.

However, the best way to check is to implement an automated tool. All lists and registrations are already integrated in this system, which makes it possible to check all partners with just a few clicks. A fully automatic recording is also conceivable, which eliminates the effort for the internal departments in the company. In this respect, you decide for yourself how to view your content and how to optimize your business connections.

If you choose an automated or easy-to-use tool, new partners and employees will be audited in a matter of seconds. Availability as a tool ensures that recording does not cause time and that a technical check can be performed on all business devices. In this way, technical integration does not become a challenge, but can be implemented at any time.

However, it is also important in terms of personnel that the willingness to take the test is present. Therefore, in most cases, a compact introduction is a great way to see the meaning and benefits of such a program. If each employee regularly checks new partners and employees, the sanctions lists will be maintained. Thus, nothing stands in the way of a comprehensive and secure examination without you having to expect penalties for a violation of the sanctions provisions.

If you want to register a new customer, you must first review the sanction lists. This ensures that cooperation with the customer is also permitted from a legal point of view and that there do not have to be any existing locks or restrictions around the possible cooperation. However, in addition to creating a new customer, such a check is also required before a new shipment is dispatched. This ensures that the sanctions list has not changed content, but that it is still up-to-date.

The same reason applies to verification in connection with financial transactions. A frequent look at the list makes it easier to match your own business relationships and enable a full audit. The personnel sanctions lists also play an important role when it comes to hiring new employees. This allows you to ensure in advance that you maintain the necessary transparency in your transactions and that you avoid doing business with companies on the list.