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Best practices for KYC/AML

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Understanding the UN Sanctions List for More Transparency and Compliance

Sanctions are punitive measures taken by our governments to deter financial crime and protect lawful citizens. Sanctions target individuals, businesses, or even countries,  that pose a potential threat due to their involvement in criminal or terrorist activities.

The risk factors used to impose sanctions are stated by the governments, divided by the type of threat and grouped into sanction lists available for public reference. The United Nations is the most powerful peacekeeping regulator to make a sanction list, so let’s take a closer look at what their sanctions stand for.

What are UN sanctions?

UN sanctions list is maintained by the United Nations member countries and organizations to eliminate terrorism and weapons proliferation, oppose human rights violations or violations of international treaties, money laundering and deliberate destabilization of sovereign countries, and drug trafficking, etc.

Depending on the situation, these sanctions apply to economic, cultural, trading, or diplomatic relationships. An example of the UN sanctions is the U.S. long-standing embargo on all commercial activity with Cuba.

At the moment, the UN has active sanctions against such countries as Afghanistan, Central African Republic, Democratic Republic of the Congo, the Democratic People’s Republic of Korea, Iran, Libya, Mali, Somalia, Sudan, and Yemen and organizations as ISIL and Al-Quaeda.

UN Sanctions Types

There are five main types of sanctions.

  • Diplomatic

Termination of cooperation, breaking all diplomatic bounds such as country’s embassies, councils, and joint cultural events.

  • Economic

Trade bans and barriers such as increased fees in certain economic sectors such as food, weapons, pharmaceuticals, etc.;

  • Travel

Various restrictions on travel from a comprehensive ban for all nationals of a country, a ban on travel to rebel-held territory within a country, to an aviation ban on all flights into or out of a country, etc.

  • Sport

Disqualification of a certain nation from participating in international events, sports, and cultural boycotts is used as a way of moral coercion.

Such restrictions prevent sanctioned entities from conducting financial transactions or engaging in business interactions with certain UN countries. And that is a very important fact that brings us further.

Why Are UN Sanctions Important for Businesses?

When a business onboards a sanctioned client being unaware of that, it creates a threat to their safety and compliance. The consequences vary from security breaches, stolen funds, and regulatory fines to civil and criminal penalties. 

Is there a solution? Being aware of all the sanctions and processing customers based on  the restrictions they or their country bears. 

Using Automated Screening Software to Stay Aware of Sanctioned Nationals

Manual check is no longer helpful and scalable enough for onboarding loads of people coming to use a certain service or interact with a certain business. Besides that, personal data is too tricky to check and can’t be processed as accurately as it can be done with automation.

Screening software proved to be more efficient and precise when it comes to searching and analyzing the data across sanctions lists. An automated KYC/AML solution is the best choice to make if you are looking to protect your business. It can help you monitor individuals on global sanctions lists, including OFAC, UN, HMT, EU, and DFATdr.

Frequently Asked Questions about UN Sanctions List

  • What is the UN Sanctions List?

    The UN Sanctions List is a UN-issued list of countries and individuals that face economic, trading, or diplomatic limitations due to their criminal or peace-violating activity.

  • What are the different types of UN Sanctions?

    Diplomatic (e.g. end of countries’ cooperation), economic (e.g. trade ban, tariffs on foreign products), travel (e.g. travel ban, aviation ban), sport (e.g. disqualification).

  • Where can I learn more about the UN Sanctions?

    Learn more about the UN sanctions on the United Nations’ Official Website. Otherwise, read our blog for more insights on the UN Sanctions.