Everything You Need To Know About the Sanctions Screening Process

As the world is becoming more and more interconnected, businesses are facing many challenges and one of the most critical ones is complying with sanctions regulations. A huge problem that businesses face is being involved in transactions or working with sanctioned people, organizations or countries without knowing that they are on the sanctions list and then paying heavily for the violation. Sanctions Screening Process can really help here.

For businesses that have their operations spread out around the world, it becomes difficult to know about the sanctions in different areas. Upon violating them, they have to deal with legal outcomes and also harm to their image. Sanctions Screening can be very helpful in such cases. When a business does not comply with regulations surrounding sanctions, it may have to face heavy fines, loss of business licenses, and damage to the company’s image. Apart from this, it may also unintentionally support illegal activities and crimes like terrorism, money laundering, etc. 

Sanctions checks requires businesses to pay close attention to detail so they can get a better understanding of how the regulatory world is working. Sanctions lists do not stay the same forever. In fact, they keep changing and updating. Therefore, it is important to update the screening process so it can adapt to changes. Businesses must also take into consideration spellings of names, aliases, and linguistic subtilities which makes the screening process a bit complex. One of the biggest challenges that businesses go through during Sanction List screening is the coming of false positives or wrong alerts. False positives occur when the system incorrectly hails someone because of their name or any other identifier being the same as the person on the sanction list. Fixing these alerts needs humans so it can be further looked into to see if the match is genuine or not. This entire process is extremely time-consuming and requires resources.

Sanctions screening services are usually taken by businesses who want to focus more on other operations. These services are known for providing advanced screening technologies, access to a huge number of databases and expert help. By outsourcing your sanctions screening to these professionals, you can make sure that there is thorough and accurate screening being done while focusing on the core operations of the business. 

Organizations should also conduct global sanctions screening in order to get rid of risks in the best way possible. When they are working across different borders they have to follow multiple compliance requirements. 

What is the Sanctions Screening Process?

Here’s how the Sanctions Screening Process works: 

Data Collection:

The first and foremost step is gathering data which includes all relevant details of the clients like their names, addresses, etc. These details are collected from a number of sources like their applications for account, transactions, etc. 

Sanction List Screening:

The gathered information is then cross-checked against different sanction lists which are maintained and given out by the government, international organizations and agencies. These lists carry the names of people, businesses and countries that are on the sanction list because of their involvement in practices that may be harmful or inappropriate. 

Screening Automation:

Numerous organizations make use of automated screening systems that work on advanced algorithms that help in matching the data of customers against sanction lists easily. These frameworks make use of matching methods to check variations in name spellings, aliases, and linguistic subtleties to decrease the risk of false positives and to smoothen out the process.

Sanctions Screening Alerts:

When a match is seen by the system during the screening process, it gives out alerts and flags to take it into further examination. These alerts are known as sanctions screening alerts. When they occur, human intervention is needed to see if the alert is genuine or not.

Alert Investigation:

Compliance experts and teams audit the entries to check the degree of risk and decide the action that can help in eliminating it. To avoid this from happening, it is extremely important to identify people accurately while onboarding them.

Resolution and Escalation:

In light of the outcome of the examination done in the previous step, alerts are resolved as either a genuine match or a false positive. If a match is legitimate, it requires further attention as transactions need to be blocked, assets to be frozen and regulatory bodies need to be updated. If it is just a false positive, then the transactions continue as usual.

The Way Forward For Businesses

As the regulatory needs continue to change it is very important for businesses to keep their eyes open and make use of an effective approach to sanctions compliance. By investing in technologies and using industry best practices they can make sure their strategies ensure ongoing compliance. 

So, why are you still behind and not making use of sanctions screening? AML Watcher is one of the best sanctions screening system providers. What is best about our system is that it has access to 60,000+ datasets.

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