What is sanctions screening? Definition and example

Sanctions screening

Sanctions screening is checking customers, business partners and payments against official sanctions lists, such as those published by OFAC, the EU, the UN Security Council and the UK, to stop dealings with designated people, companies and countries.

Also called: sanctions check, sanctions list screening, watchlist screening, OFAC screening, sanctions compliance

Updated 19 October 2026

How does sanctions screening work?

Names and identifiers of customers, sellers, owners and counterparties are compared with official lists: the SDN list and other lists maintained by OFAC in the United States, the EU’s consolidated list of persons, groups and entities subject to financial sanctions, the UN Security Council Consolidated List and the UK Sanctions List, which the UK government says has been the only source for all UK designations since 28 January 2026. Matching is fuzzy, because names are spelled and transliterated in many ways. The UN list, for example, records names in their original script and separates good-quality aliases from low-quality ones that are probably not enough for an identification alone.

What happens after a hit?

Someone reviews it. OFAC’s guidance recommends comparing every detail of the listing with what is known about the party. If the match is not valid, the payment can proceed. If it is, the funds must be blocked or the transaction rejected, depending on the sanctions program, and OFAC requires blocked or rejected transactions to be reported within 10 business days. As an illustrative example: a marketplace screens 20,000 seller payouts a month and its tool raises alerts on 0.5% of them. If 98 of the 100 alerts are cleared as false positives, two payouts need deeper review, but all 100 wait until someone looks.

What are the trade-offs?

Loose matching floods the review queue and delays genuine customers; strict matching can miss a designated person spelled differently. Which lists apply depends on where a business and its providers operate, so the set-up should be agreed with compliance advisers.

Where does Omno use it?

Omno is not a sanctions screening vendor. Connected PSPs screen what they process under their own rules, and merchants screen customers and sellers in their own systems. Those outcomes can reach Omno through customer groups and customer verification levels, and payouts can be held for manual approval before they are released.

Frequently asked questions

Is sanctions screening the same as AML?

It is one part of an anti-money laundering and financial crime programme, but the obligation is different. AML controls are risk-based: they look for suspicious behaviour and react in proportion. Sanctions rules are prohibitions: dealing with a designated person is not allowed at all unless a licence or exemption applies, whatever the amount.

Why do so many screening alerts turn out to be wrong?

Because matching is deliberately loose. Names are common, spelled differently and transliterated from other scripts, so tools flag near matches. OFAC's guidance says many potential matches are false positives and recommends comparing all details, such as date of birth, nationality, identification numbers and address, before deciding. OFAC does not confirm or clear matches itself.

When should a business screen?

At onboarding, again whenever lists change, and on payments and payouts as they happen. Lists are updated often: the UN Security Council's page, for example, shows the date of its latest update and says each version supersedes all previous ones. A customer cleared last month can be designated today.