What is Sanction Screening in AML Compliance?

Sanction screening is the process of checking individuals, entities, or transactions against global sanction lists such as OFAC, UN, EU, and HM Treasury to prevent financial crime.

Why is Sanction List Screening Important for Financial Institutions?

Screening helps banks and other regulated firms avoid dealing with sanctioned parties, thereby reducing legal, financial, and reputational risks.

What Sanctions Lists Should Be Screened?

Common lists include OFAC (SDN List), UN Sanctions, EU Sanctions, UK HMT list, and local jurisdictional lists (e.g., DFAT, MAS, SECO).

How Often Should Sanction Screening Be Performed?

At minimum, during onboarding and on a daily basis through ongoing monitoring, especially when dealing with high-risk customers or jurisdictions.

What’s the Difference Between Sanction Screening and PEP Screening?

Sanction screening checks for prohibited individuals/entities, while PEP screening flags politically exposed persons for enhanced due diligence.

How does the Free Sanction Check work?

You simply enter a name into the tool. It automatically scans multiple updated global sanctions lists using advanced matching technology and provides results in seconds.

Which sanctions lists are included in the search?

The tool checks major global lists, including OFAC, UN, EU, UK HMT, Canada, Australia, Switzerland, and more — updated daily for accuracy.

Is the Free Sanction Check really free?

Yes — the tool is free for manual, individual checks. If you request a demo, we’ll show you free examples, but advanced features like bulk checks or API access require a paid plan.

What Is Sanction Screening? Check Global Sanctions

What is Sanctions Screening?

Sanctions screening is the process of checking people, businesses, and organizations against official sanctions lists. The aim here is to make sure these entities do not involve themselves in prohibited transactions. Sanctions screening is a vital step in the customer due diligence process and is required by anti-money laundering (AML) and counter-terrorism financing (CFT) regulations around the world.

What is a Sanctioned Entity?

A sanctioned entity refers to an individual, company, or country that faces restrictions from governments and international organizations. These restrictions include trade bans, freezing assets, and imposing arms embargoes. Major authorities are as follows:

The United Nations (UN)
The U.S. Office of Foreign Assets Control (OFAC)
The European Union (EU)

Sanctioned entities are blacklisted for serious reasons, including funding terrorism, violating human rights, causing nuclear proliferation risks, or threatening international and global peace and security.

Why is Sanction Screening Important?

Regulatory Compliance: Ensures businesses follow international sanctions laws and avoid legal penalties.

Risk Mitigation: Helps prevent dealings with entities involved in illegal or high-risk activities. Reputation Protection: Shields your business from any damage caused by blacklisted entities.

Does Sanction Scanner Offer Free PEP or Sanction Screening?

Sanction Scanner does not provide unlimited free access. However, you can request a free demo to explore key features. Request Demo form and explore the following services:

Conduct real-time PEP and sanction checks,
Run sample scans against global watchlists,
Test API in a sandbox environment
Access to audit trails, risk scoring ,and other monitoring tools

What Is Sanction Screening Software?

Checking individuals, organizations, companies, and transactions against global watchlists such as OFAC, UN, EU, and HM Treasury automatically, Sanction screening software helps businesses inhibit illegal financial activity and meet AML/CFT obligations.

How Does Sanction Screening Software Work?

With the purpose of detecting exact or partial name matches, Sanction Screening Software utilizes real-time data from official sanctions lists and applies fuzzy matching. Thus, it can detect potential risks, produce audit logs, and integrate into KYC or onboarding workflows with API.

Why Is Sanction Screening Software Important?

It guarantees regulatory compliance, decreases the penalty risks, and guards your organization against associating with sanctioned or high-risk entities. As a result, it is a must in 2025 for financial institutions, fintechs, and high-risk industries.

Best 5 Sanction Screening Software (2025)

Software	Key Strengths	Suitable For
Sanction Scanner	Real-time screening, global list coverage, flexible API	Banks, fintechs, crypto firms
ComplyAdvantage	AI-powered risk detection, AML data graph	Financial institutions
Refinitiv World-Check	Curated data, strong global presence	Large enterprises, regulators
Dow Jones Risk & Compliance	Detailed PEP/sanction profiles, adverse media	Banks, law firms
NameScan	Affordable, easy to integrate	SMEs, onboarding platforms

What are the Differences Between PEP Screening and Sanction Screening?

While both aim to reduce financial crime risks, PEP and sanction screening slightly differ. We have summarized key elements here in this table.

Features	PEP Screening	Sanction Screening
Purpose	Identifying politically exposed individuals	Detect sanctioned persons/entities
Data Sources	Government positions, family ties, media	UN, OFAC, EU, UK HMT, SECO, etc.
Risk Approach	Enhanced due diligence (EDD) required	Restrictions
Action Taken	EDD, risk scoring, monitoring	Financial transactions are banned.

Why are Sanction Checks Critical in Compliance?

If businesses fail to implement PEP and sanction checks, they may face serious legal and reputational consequences. Here is why this process matters:

● Regulatory Compliance: Global AML/CFT frameworks like the Financial Action Task Force (FATF) and EU Anti-Money Laundering Directives (AMLD) require businesses strict due diligence.

● Crime Prevention: This process requires customers to be consistently screened.

● Reputation Protection: Being associated with high-risk individuals can damage credibility.

● Maintaining Banking Relationships: Weak compliance can label a business as high risk, leading banks to end relations.

How to Conduct Reliable Sanction Checks?

To ensure effective compliance, financial institutions must consider official sanctions lists. Here we have listed them for you:

1. Screening at onboarding includes checking all new customers against global watchlists.

2. Ongoing monitoring includes detecting status changes or risks.

3. Assessing and escalating risks includes a careful evaluation of PEPs through Enhanced Due Diligence (EDD).

4. Maintaining records includes checking documents and results to ensure full compliance.

What Global Sanctions Lists Must Be Considered for Effective Screening?

To sum uğ, financial entities must consider using official sanctions list. Here are the listed information.

Sanctions Authority	Region/Country	Example Lists
OFAC	United States	SDN List and Non-SDN Iran List
United Nations	Global	UN Consolidated List
European Union	EU	EU Financial Sanctions List
HM Treasury	United Kingdom	UK Sanctions List
SECO	Switzerland	SECO Sanctions List Financial Sanctions List
DFAT	Australia	DFAT Consolidated ListEuropean Union

Which Sectors Should Use Sanctions Screening?

PEP and sanctions screening is necessary in multiple industries. Here we have summarized them for you:

Sector	Reasons for Screening
Banks	All financial institutions are required to identify customer risks.
Fintech & Crypto Providers	If classified as Virtual Asset Service Providers (VASPs) by FATF, all client transactions must be monitored.
Real Estate Agencies	If involved in large asset transactions, PEPs may be laundering illicit gains.
Law Firms & Notaries	Check these institutions as they often represent high-risk clients.
Casinos & Gaming Operators	Online gaming involves large cash flows that need to be closely monitored.
Insurance & Investment Firms	These companies must verify the sources of funds.
Accounting & Audit Firms	These firms must be closely monitored as they assist with tax planning and cross-border transfers.
Precious Metals & Luxury Goods Dealers	They are considered high-risk industries because they often hide or move illicit wealth.
DNFBPs (Designated Non-Financial Businesses and Professions)	Under FATF Recommendations 22, 23, and 28, it is required to conduct due diligence.

What are the Regulatory Requirements Sanction Screening?

Jurisdiction	PEP Screening	Sanction Screening	Notes
USA (FinCEN)	Recommended	Mandatory (OFAC)	Civil/criminal penalties for violations
UK (MLRs)	Mandatory	Mandatory	Applies to beneficial owners
EU (AMLD)	Mandatory	Mandatory	Requires UBO transparency and EDD
FATF	Mandatory	Mandatory	Considered the global standard in regulation

How does Sanction Scanner Support Sanction Screening?

Sanction Scanner provides automated tools that screen PEPs in real time so that you can stay updated. Our team checks global watchlists and databases to make sure you have powerful compliance solutions. Here are some of our services:

Real-time Screening: Scan entities instantly against over 3,000 global lists.

Risk Detection: Identify PEPs whether they are domestic or international. Get to know more about their associates.

Easy Integration: Connect directly with CRMs, integrate seamlessly with KYC flows, banking platforms with flexible APIs.

Audit-Ready Features: Keep detailed, secure logs for transparency checks. Trusted by financial institutions, Sanction Scanner makes compliance easy and safe.