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What is a Sanctions Check?

May 08, 2016

‘What is a Sanctions Check?’ is an increasingly frequent question asked by customers – especially those who are suppliers to financial services firms. Recent high profile money laundering cases have resulted many financial services firms asking their suppliers to sanctions check their employees, so this brief blog post explains what a sanction is and how we can help via our Sanctions Check.

What is a Sanction?

A sanction is a set of measures designed to penalise or force a particular type of behaviour. They are made by governments or monetary authorities / central banks against other countries, organisations or a specific individual. Sanctions can take several forms:

Economic sanctions: typically a ban on trade, possibly limited to certain sectors such as armaments, or with certain exceptions (such as food and medicine), for examples sanctions on North Korea designed to hinder their ability to produce nuclear weapons.

Trade sanctions: a type of economic sanction applied for non-political reasons, typically as part of a trade dispute, or for purely economic reasons, and typically involving tariffs or similar measures, rather than bans, e.g. Brazil sanctions against imports from the USA.

International sanctions: coercive measures adopted by a country or group of countries against another state or individual(s) in order to elicit a change in their behavior, recent examples include sanctions against Libya and Iraq by the USA, Great Britain and EU.

Sanctions against organisations or individuals are typically made where the individual or organisation is known to be directly or indirectly involve in crime or terrorist activity for example by laundering money. 

Regulatory Enforcement

Rulings made by regulatory entities aren’t sanctions in the strictest sense but are an essential part of a comprehensive sanctions check / anti-money laundering check. Regulatory enforcement entities can make rulings against individuals or organisations where their rules have been contravened. Examples of regulatory enforcement entities are the Financial Conduct Authority (FCA), Office of Foreign Assets Control (OFAC) USA and the Securities and Exchange Commission (SEC) USA. Examples of activities for which rulings may be made include insider trading, money laundering, false reporting etc.

How our Sanctions Check helps

While the sanctions and regulatory enforcement bodies publish their enforcement data, these lists can run into thousands of names so checking all sanctions sources would be an incredibly time consuming and laborious task. The Sanctions Check offered by Know Your Candidate uses the market leading system as used in compliance departments across the UK financial services industry and checks your candidate’s name against lists issued by over 460 governments, regulatory and law enforcement bodies from all over the world. Results are delivered in 24 hours and wherever possible we qualify out false positives to ensure accurate results.

 


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