Sanction screening is one of the most important elements of due diligence, enabling businesses to validate the real identities of businesses against the authorized global data lists and verifying if the incoming profile is subject to any sanctions.
Sanctions are usually issued to entities, nationals, groups, and businesses that engage in non-compliant activities, such as narcotic drug trafficking, export of restricted arms of mass destruction material, money laundering, terrorism financing, and other related regimes.
When a profile is subject to sanctions, engaging in commercial conduct with the profile will be deemed a violation by the federal authorities, especially in the U.S. The legal and civil implications of sanction violations are too drastic to disregard.
Hence, federal authorities, such as the OFAC encourage businesses to engage in compliant business conduct and verify the customers and business profiles prior to onboarding.
Now, let’s say that you’re recruiting a well-known, foreign artist to design something for your business; it is worthy to vet the profile prior to onboarding.
Essentially sanction screening enables you to prevent risk and improve the quality of profiles you onboard. This practice is mandated by several regulatory bodies in the U.S., including the OFAC to allow businesses to validate and verify the real identities and background of the incoming profiles, which would result in risk assessment and business transparency.
The following will discuss in brief the Consolidated Sanctions List, the checks it comprises, and its benefits to a large scale of enterprise industries.
Let’s get to it.
OFAC Consolidated Sanction Checks: An Overview
The Consolidated Sanctions list is a combination of sanctions other than the SDN (specially designated nationals) sanctions. The Consolidated Sanctions list comprises the identities of all the entities and individuals that have violated the OFAC regulations.
The Consolidated Sanctions checklist includes the following checks.
- The Non-Specially Designated Nationals(Non-SDN)
- Palestinian Legislative Council List (NS-PLC List)
- The Part 561 List
- The Non-SDN Iran Sanctions Act List (NS-ISA List)
- The Foreign Sanctions Evaders List (FSE List)
- The Sectoral Sanctions Identifications List (SSI List)
Engaging in commercial conduct with sanctioned profiles brings prohibitory actions on the business, including but not limited to financial and civil liabilities.
How Does Consolidated Sanctions Check Work?
The Consolidated Sanctions screening brings to you a unique opportunity to identify, validate, and verify the profiles and their sanction history (if any) with just one check.
The Consolidated Sanctions check is a list of all the important security compliance checks one would need to thoroughly validate the identities of the profiles (entities and individuals). And given the exhaustive list of sanction programs and program tags under which all these profiles are segregated, verifying the profile’s credibility takes time.
Previously, businesses had to conduct these checks independently to verify the identities and check if the profile is listed in any of these authorized data lists.
However, with Compliancely, this is no longer a problem. you can easily screen a profile with the Consolidated Sanctions check in one go. This means no more wasting time on individual checks. Get all the information you need with a simple check.
When Do Businesses Need Consolidated Sanctions Screening?
Businesses need Consolidated Sanctions screening on a variety of timelines.
For example, the KYC process, which is usually practised prior to onboarding, requires identity verification. Consolidated Sanctions screening will simplify the risk assessment process during this time.
And the customer identification process (CIP), which heavily relies on customer due diligence and enhanced due diligence procedures, mandates sanction screening for financial disclosure and profile genesis.
Further, continued risk monitoring, which is an essential security regime for the BFSI sphere, relies on sanction screening to ensure that the profile is compliant and poses no threat.
So, in a way, businesses need sanctions screening across all cycles of the profile onboarding process.
The Consolidated Sanctions checklist from Compliancely will further accelerate this critical element of identification.
How To Access OFAC Consolidated Sanctions Checks?
While it is hard to verify and validate the identities of individuals and entities against the individual sanctions lists as published by the OFAC (with no regular intervals), businesses can rely on Compliancely’s real-time Consolidated Sanctions screening checklist.
This list comprises all the entities and individuals who have been sanctioned by the OFAC and includes sanction identities of profiles except the SDN sanctions list.
What’s more? Compliancely automatically re-screens your customer/client/entity data as and when the source data lists (OFAC) are updated, giving the most recent, real-time, and accurate results.