With governments fighting financial crime worldwide emerge sanctions — lists of countries, individuals or entities which are involved or suspected to be in coherence with illegal activities.
UN sanctions are diplomatic decisions imposed by the United Nations countries and organizations against other states, individuals or entities. These sanctions are security measures to protect national safety interests, international law, and peace.
The international sanctions are usually special restrictions on economic, cultural, diplomatic and trading relationships with a certain country, organization or designated individual.
It is important to know if the client comes from a sanctioned country or have been a subject to specific regulations so the company can act accordingly and either block them or apply necessary restrictions to their interaction. Businesses have to comply with these regulations, otherwise, they will be faced with strict legal implications such as civil and criminal penalties.
Sanctions and the way of handling them are diverse and depend on a specific case or reason to applied regulations. Subjects to sanctions might be specific individuals banned from the UN, such as terrorists or the whole countries, which means that their nationals subsequently become influenced by the restrictions such as travel ban or trade barriers.
What are UN sanctions and their types?
UN sanctions are imposed by the government or international authorities as a result of illegal activity or diplomatic policy. As the most powerful international peacekeeping regulator, United Nations sanctions list aims to prevent terrorism, weapons proliferation, violation of international treaties, money laundering, narcotics trafficking, deliberate destabilization of sovereign countries, etc.
Sanctions can be:
- Diplomatic — removals of diplomatic ties such as country’s embassies or councils;
- Economic — trade bans on certain economic sectors such as food, weapons, medicine, etc.;
- Military interventions;
- Environmental — protecting the environment and safeguarding natural resources;
- Sport — disqualifying a certain nation from participating in international events.
For example, the United Nations financial sanctions list includes such countries as:
- Afghanistan
- Central African Republic
- Democratic Republic of the Congo
- Democratic People’s Republic of Korea
- Iran
- ISIL and Al-Qaida
- Libya
- Mali
- Somalia
- Sudan
- Yemen
For these countries nationals being on the list means that they might be subjects to travel ban, financial or commodity restrictions such as not being allowed to have any business or conduct monetary transactions, etc. with UN countries or specific regions within it.
The benefits of working with automated screening software
Nowadays, having bulks of clients and transactions businesses simply can’t administrate to every case manually. It is a huge amount of data with names and all the peripheral details on each individual in question. That is why companies have begun to incorporate screening software which proves to be more efficient and 99% accurate.
To protect your business and be aware of sanctions updates it is crucial to implement a full-fledged risk screening software. For example, our automated KYC/AML solution that will help you monitor individuals on global sanctions lists, including OFAC, UN, HMT, EU, and DFAT.