What Is Sanction Screening? Check Global Sanctions

In this blog post, we will be talking about and explaining sanctions screening. Sanction screening is done by checking people or entities and government-issued or international sanctions lists like OFAC, UN, EU, and HM Treasury are used as guides. 

What is Sanction Screening?

Sanctions screening is done to prevent our readers and their companies from doing work with sanctioned people, entities or regions. It is essential for reaching AML and CFT compliance.

What is a Sanctioned Entity?

Entities and individuals who are blacklisted because of their past acts or involvements with terrorism, weapons trafficking, money laundering, or geopolitical violations are sanctioned entities. Some examples for these sanctions we can give are OFAC SDN, UN Sanctions, and EU CFSP listings.

Why is Sanction Screening Important?

Let’s talk more about the importance of sanction screening. Our first reason is because it is a regulatory requirement in all major AML regimes. Without sanction screening, your company’s reputation might not stay as clean. Another reason for choosing sanction screening is because it helps prevent financial crime non-compliances that might occur otherwise. Finally, sanction screening helps with avoiding penalties. Sanction screening is essential for avoiding fines, financial crimes, and a decrease in company reputation.

Does Sanction Scanner Offer Free PEP or Sanction Screening?

We at Sanction Scanner offer you, our readers, limited free trials and demo screening options. One of the many reasons for using Sanction Scanner when PEP or sanction screening is that we are great for testing API integration and matching performance accordingly.

What Is Sanction Screening Software?

A sanction screening software is tools that use regularly updated sanctions lists to automatically scan customer or transaction data. This software is often integrated into onboarding, KYC, and payments systems. This software helps build trust between the company and their customers as well as helping with compliance.

How Does Sanction Screening Software Work?

Sanction screening software firstly uses fuzzy matching logic; this is done to detect names that are similar but not quite identical to those which are on sanctions lists. It does this by checking aliases, variations, and translations across several systems.

The next item that is used is real-time data feeds. These help by making sure the software is using the latest sanctions lists when checking for names. Finally, scoring, alerting and escalation workflows help compliance teams figure out how to manage the matches in quick and efficient fashion. Scoring is done by giving every potential match receiving a score based on several factors. Alerting is matching high-risk customers with alerts to ensure immediate review. Escalation is for situations that can’t be solved automatically; these are sent to compliance officers for investigation purposes.

Why Is Sanction Screening Software Important?

Sanction screening makes sure you reach regulatory compliance that your company needs. It also helps prevent possible crimes from occurring. Since this software helps prevent transactions from sanctioned parties, it prevents money laundering.  Therefore, your company’s reputation is kept safe and your business relationships remain unscathed. Sanction screening software is essential for companies since manual screening is prone to errors. Manual screening is also not sustainable long term. Using a software instead helps with ensuring speed. As well as speed, it gives more accurate results. It is easier to audit records when using a sanction screening software.

Best 5 Sanction Screening Software (2025)

There are several sanction screening software providers that can help you meet your AML/KYC compliance goals. Some of which are Sanction Scanner, Dow Jones Risk & Compliance, LexisNexis Bridger Insight, Refinitiv World-Check, and NameScan. Sanction Scanner is perfect for those who are looking for an all-inclusive AML solution for their problems. Fintech companies,  cryptocurrency firms, and banks can benefir greatly from their real-time monitoring. Dow Jones Risk & Compliance is recommended for those who are looking for a tool that uses manually validated data; it is for you if you are a global finance institution with high compliance requirements. LexisNexis Bridger Insight is popular with insurance and lending sectors.  Sadly, its interface is not really accessible. You can get sanction screening from this provider as well. Refinitiv World-Check for banks that have substantial compliance budgets as well as traditional infrastructure. High-risk entities can get flagged and later original risk notes are given to the bank. NameScan is an affordable option that is easy to integrate. This provider is great for SMEs and onboarding platforms.

What are the Differences Between PEP Screening and Sanction Screening?

In this part, we’ll be talking about what makes PEP screening and sanction screening different. Let’s first talk about their demographic differences. PEP screening deals with high-risk political individuals, whereas sanction screening deals with legally resctricted parties. When comparing legal consequences that companies face from not using these screenings, sanction screening has more direct consequences that lead to activities being paused. PEP screenings are equally important but the consequences you will face might be more indirect and take a while.

Finally, the difference between the frequency of these screenings is our last subject. PEP screening requires ongoing monitoring since it deals with negative news of PEPs, whereas sanction screening needs to occur real-time and can also be also event-based.

Why are Sanction Checks Critical in Compliance?

Sanction checks are important for compliance and there are many reasons for it, these screenings help prevent legal violations and fines. One of the most essential reasons is that these screenings are mandatory under FATF recommendation 6 and 7. 

For example, a law firm called Herbert Smith Freehills got a £465,000 fine from the Office of Financial Sanctions Implementation (OFSI). This occurred because of breaches of sanctions involving Russia. The firm’s Moscow office made nearly £3.9 million in payments to sanctioned Russian banks like Alfa-Bank, Sovcombank, and Sberbank. This example shows how important ongoing monitoring and AML/CFT compliance when dealing with sanctioned entities is. 

How to Conduct Reliable Sanction Checks?

The first way of conducting reliable sanction checks is by integrating real time screenings. These screenings that happen in real time need to both occur during onboarding and the payment stages. 

Another tip you can complete reliable sanction screenings without facing any trouble is by using multiple list sources. The more you can research, the better. According to the research of Thomson Reuters, one other way of conducting reliable checks is by implementing a risk-based approach (RBA). This will make sure you spend more time and resources on higher risk people while not doing as much control on lower risk people.  Finally, maintaining alert resolution logs help immensly when dealing with past occurrences. Having ready audits will not only help you protect your safety within your company, it will also help during future potential investigations towards your customers that might occur.

What Global Sanctions Lists Must Be Considered for Effective Screening?

For reliable screening, organizations must consider key global sanctions lists; some of which will be given below. The first example is the U.S. OFAC list. Our second example is the UN Consolidated List. One other example is the EU Common Foreign and Security Policy (CFSP) list. Another example is the UK HM Treasury list. SECO in Switzerland is also essential. DFAT in Australia is really important as well. All of these ensure coverage and reduce the risk of missing sanctioned parties. 

Which Sectors Should Use Sanctions Screening?

The first sector we’ll talk about is the financial sector, this includes institutions like banks and payment services. Since these institutions heavily involve transactions, they should have extra protection.

Our second sector is crypto firms. These companies should use sanctions screening to prevent money laundering and terrorist financing risks. Another sector we’ll walk about is the e-commerce platforms. These companies can benefit greatly from real-time sanctions screenings.

One other sector we’ll talk about is the insurance and legal sector. These firms deal with lots of clients who might be sanctioned parties, making sure they are implementing sanction screening must be essential for our readers. Another example is remittance companies. These companies especially need sanction screenings since they also deal with payments that go across countries. Similarly and finally, import and export business should also be careful since they must comply with trade restrictions and embargoes. Sanctions screening helps companies ensure they are compliant with international sanctions and trade restrictions. 

What are the Regulatory Requirements Sanction Screening?

In the U.S., OFAC is requiring a strict liability standard that warns companies against non-compliance. In the EU, AMLD is in charge of demanding risk-based screening and recordkeeping to ensure AML/KYC compliance requirements are met.

In the UK, MLRs 2017 requires that during a business partnership, screening must be done and this screening being ongoing rather than just while onboarding is essential. FATF recommendations 6 and 7 also requires freezing of assets, reporting of matches, and prohibiting transactions of the sanctioned parties.

How does Sanction Scanner Support Sanction Screening?

We at Sanction Scanner help you by integrating 3000+ global watchlists to our system, this ensures that you have a wide range of sources while scanning. AI-driven fuzzy matching and alert scoring help speed up the process since you will have a ready-to-go software to deal with possibly sanctioned parties.

While working with Sanction Scanner, you will receive real-time updates from your sanction screenings. We also provide customisable workflows which helps immensely since they are embedded. Seamless API onboarding is another feature of Sanction Scanner that you can’t go without. Finally, our ongoing monitoring and instant alerts make sure you never have to worry about your customer-base being filled with sanctioned entities; and potential matches are sent to compliance teams immediately. Trusted by financial institutions, Sanction Scanner makes compliance easy and safe.