If the company violates this regulation, high fines or even prison sentences of up to ten years will be incurred. This applies regardless of whether the violation was negligent or intentional. The management will be held accountable, or in some cases, the person responsible for exports.
To prevent all this, it’s crucial to perform sanctions list screenings. In this article, we’ll explain the best way to do this, what you should pay attention to, and which software is recommended.
What are sanctions lists?
Sanctions lists are catalogs of companies or individuals who have already been penalized with legal and economic restrictions. These lists are found in various sanctions regulations, examples being EU Regulations No. 753/2011 (Taliban), No. 881/2002 (Al-Qaeda), and No. 2580/2001 (Anti-Terrorism). The practice of checking sanctions lists emerged after the attacks of September 11, 2001. The benefits of these lists include preventing money laundering, identifying terrorism financing, and conducting export compliance screening and blacklist checks. All these terms are summarized under the title “sanctions screening.”
Generally, every company based or operating in the EU is obliged to regularly check internal business contacts and business partners against EU regulations and the Foreign Trade Act (AWG). If the company is involved in international business, these contacts and partners may need to be checked against additional sanctions lists that go beyond EU regulations. The relevant sanctions list then varies depending on the specific business. For countries outside the EU, the regulations of the respective country or the resolutions of the United Nations apply. For Switzerland, for example, the Swiss Embargo Act applies, while the USA must comply with the so-called OFAC list collection, although not every hit needs to be reported in the United States.
As an entrepreneur, you must always ensure that none of your business partners are listed on a sanctions list; otherwise, you must immediately initiate further steps. This partner may not receive any financial contributions or economic resources, and there is also a duty to report every match to the competent authority. Therefore, entrepreneurs should always prioritize a professional and comprehensive sanctions list screening, both in their own interest and in a legal sense.
How does the sanctions list screening work?
A sanctions list screening is necessary before financial transactions, before hiring new employees, and with every shipment of goods. It is also required when you come into contact with a new customer.
However, a distinction is made here whether the check is performed manually or via software. For manual checks, the sanctions lists are available on the website of the federal and state justice portals. There you will find organizations, groups, or individuals who, according to EU regulations, have an extensive prohibition on disposal.
Manual checking is significantly more complex and requires a higher level of concentration than checking with software. The risk of errors increases. With the immense volume of data that comes with many different transactions, it is almost impossible to maintain permanent control. Therefore, software is recommended for a quick and uncomplicated check.
What are the advantages of the Trade Monkey product Swiss Sanctions?
To ensure legally compliant business relationships, to demonstrably carry out sanctions screenings, and to efficiently identify business partners, Swiss Sanctions enables exactly this thanks to its automated screening. The screening covers natural and legal persons and automatically identifies a possible risk for you and your company.
Swiss Sanctions can be connected to SAP and many other ERP systems via customized interfaces, allowing you to benefit from seamless communication at all times.
Swiss Sanctions – How the Software Works
Swiss Sanctions runs automatically in the background. Address matching happens daily, immediately after creation, and against all relevant lists, which can be expanded at any time. If an address is critical, Swiss Sanctions alerts you immediately via email; a manual check isn’t necessary.
You can manually set the various screening criteria, such as tokens, aircraft, ships, or individuals. An individual check is possible at any time, allowing you to make a case-by-case decision if a hit occurs. Alternatively, mass uploads are possible. Deviations from sanctions lists are logged, and Swiss Sanctions identifies duplicates. This ensures the best possible results for you and your company.
Swiss Sanctions transmits data to the ERP system encrypted and in real-time. Addresses are checked at different times and, in the worst case, blocked. The software uses open standards, meaning the implementation of client applications or the REST API is not tied to a specific system.
Benefit from Swiss Sanctions and prevent contact with listed business partners. The penalties for a violation, ranging from very high fines to a ten-year prison sentence, are too severe to risk lightly. Our software ensures a smooth process; the sanctions list check happens automatically in the background, saving you time, costs, and effort. Test our demo version and see for yourself!
Feel free to ask us all your questions about sanctions list screening – we’d be glad to advise you.
