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.
What are the types of Sanctions?
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
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.
Why is Sanction Check and PEP check required For Companies?
Money laundering, bribery, the financing of terrorism, and corruption are financial crimes considered important all over the world. The majority of these financial crimes occur through financial systems. Regulators aim to prevent financial crimes by regulating companies in the financial sector. Various Anti-Money Laundering regulations and regulations have been published for this purpose. In order to comply with Anti-Money Laundering regulations, financial institutions need to be involved in some control processes. Sanction check is the most important process for financial institutions to ensure AML compliance. Sanction Screening Services such as Sanction Scanner allow you to perform sanction checks automatically.
Sanction and PEP Screening in Customer Onboarding Process
According to "Know Your Customer" requirements companies have to make some checks in the customer onboarding process. The purpose of these checks is to identify the customer's ability to pose any threat. In the first stage, the accuracy of the customer information is determined. Then, it is controlled whether it is on the important lists such as sanction or PEP lists. As a result of these controls, the risk level of the new customer is determined. And measures are taken to prevent damage to company values. If there is no doubt, the customer's account will be opened. However, companies have to carry out checks at certain intervals.
Sanction And PEP Screening in Transaction Monitoring Process
Millions of financial transactions take place over the day through financial systems. The regulators determined that the crimes were committed through financial transactions. Therefore, according to AML regulations, financial institutions must control the financial operations of their customers. If financial transactions are not controlled; money laundering, financing of terrorism and corruption are committed. Manually controlling all transactions can be a waste of time. Sanction Scanner provides automatic control of financial transactions with its Sanction & PEP Screening service provided with API support. Receivers and senders performing the process are checked in seconds in various data of 200 countries. If there is a suspicious transaction, the system gives an alarm and stops the financial transaction. Thus, financial crime is prevented.
Sanction and PEP Screening in Background Check Process
The most important thing for companies is the company's reputation. If a company loses its reputation, it loses its customers. Companies make internal controls at regular intervals to avoid these risks. Employment Background Check, Pre-employment background check ve company background check measures are taken by the company to protect the reputation of the company. Employment Screening is performed to our employe to check the possibility of any risk for our company. With the pre-employment screening, the compliance of the person we will employ to our company values is determined. Companies present their Employment history records as evidence of their audit status.
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 global Sanction Screening Services. With Sanction Scanner, you can check your customer. Our database consists of over 1000 Sanctions 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. You can reduce false positives with our special algorithms.