What is Sanction Check?

Sanctions are penalties imposed on individuals or institutions that do not comply with laws or rules. A sanction decision is generally applied by governments or global organizations to other states or individuals. Sanction check is to take measures to prevent transactions with persons prohibited from certain transactions and activities. There are several reasons for sanctions. The main reasons are political and economic disputes. Political and economic disputes between countries lead to sanctions against each other.

There are several types of sanctions. All of these sanctions are based on different reasons. The reasons and types of sanctions are very important for companies.

1-Economic Sanctions

Economic sanctions are a foreign policy instrument between "diplomacy" and "war." There are 3 main objectives of economic sanctions.

    ▪ Change the behavior of the target country

    ▪ Undermining the target country

    ▪ Punish the target country

2- Diplomatic Sanctions

Diplomatic sanctions are political measures taken to express dissatisfaction between the two or more governments. Some of the political sanctions are the cancellation of senior government visits and the withdrawal of diplomatic persons from that target country. 

3- Military Sanctions

Some countries cannot produce their own military equipment. Therefore, the most common type of military sanction is the prohibition of the sale of military equipment. Strong states warn the weak states by using this advantage.

4- Sanctions on individuals

Sanctions on individuals are sanctions imposed on political leaders, economic persons or illegal persons. Terrorists, drug traffickers, money launderers are sanctioned by governments or organizations. Organizations and governments can put bans on their trade relations. Their bank accounts can be blocked.

There are many regulators in the global and local areas that control financial institutions. The purpose of these checks is to combat financial crimes. Regulators require these institutions to know their customers. Regulators periodically publish know-your-customer guidelines.

How Do Companies Comply With Regulations?

Financial institutions must check their customers to comply with regulations. With the development of technology, manual sanction checks became a waste of time. There are over a thousand sanctions lists in the world. It is really impossible for companies to check them manually. Artificial intelligence-driven compliance software solved this problem. This software automates the compliance process of the companies. Financial institutions can quickly check their customers with compliance software. These software scan the sanction lists and alarm instantly for suspicious transactions.

Sanction Scanner is an AML compliance software. With Sanction Scanner, you can check your customer. Our database consists of over 1000 Sanction lists, regulatory and law enforcement and other official global and local sanction and pep lists, including those issued by the USA, UK, UN and other global major and minor government departments. It reduces your operational costs and development efforts. If you register now, you will receive a free scan credit to use the Sanction Scanner.

Request a demo and learn how Sanction Scanner prevents your firm from the Financial Crime.