Economic sanctions on the rise: The ever-increasing importance of sanctions screening in a compliance programme

Amir Fadavi
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Amir Fadavi: Senior Director, K2 Integrity, USA

Journal of Financial Compliance, 2023, vol. 6, issue 4, 333-345

Abstract: With the ever-increasing use of economic sanctions by multiple governments across the world, sanctions compliance has become a complex topic that requires the use of tools and technologies in assisting an organisation to stay compliant. Sanctions screening is one such tool. The question of whether to screen or not cannot be answered in vacuum and it has not been specifically prescribed by sanctions laws. As such, this paper suggests a system (a three-step approach) for organisations to tackle the questions of sanctions screening. This paper offers some fundamental sanctions-related information and then delves into the details of screening. It introduces a three-step approach in which the first question is whether sanctions screening is the right control for an organisation or not. Then, in the second step, it talks about the specifics of sanctions screening systems and technical factors to consider. In the last step, it covers the actions that should be done when a screening system detects a potential sanction hit. After reading this paper, in addition to being introduced to the three-step approach,, the reader will be informed about several technical aspects of screening, the role of sanctions risk assessments and how the output of sanctions screening can improve the quality of an organisation's sanctions compliance programme.

Keywords: screening; risk assessment; sanctions list; tuning and threshold; OFAC; block or reject; data quality (search for similar items in EconPapers)
JEL-codes: E5 G2 K2 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:aza:jfc000:y:2023:v:6:i:4:p:333-345

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