Key points
- Common lists: the UN Security Council sanctions list, the US Treasury Office of Foreign Assets Control (OFAC) Specially Designated Nationals list, the EU consolidated sanctions list, and China’s Unreliable Entity List and export control lists.
- Screening covers not only the direct counterparty but also banks, vessels, shippers and consignees, end users and other related parties.
- Export control review runs in parallel: under the Export Control Law of the People’s Republic of China and related rules, it determines whether goods are dual-use items and whether an export licence is needed.
In practice
For trading companies, sanctions risk rarely comes from wilful breaches; it comes from information lag. A customer is listed after a change of shareholders, a carrying vessel becomes a restricted party, or the payment route passes through a restricted bank. Lists change often, and manual searches one name at a time are slow and easy to miss.
The effective approach is to build screening into the submission points of the business process: screen automatically when a counterparty is created, a contract signed, a booking made or a payment initiated, block on a match and pass it to compliance review. Name matching uses fuzzy logic with a managed whitelist of false positives, and every screening is logged for audit. Where lists from different countries conflict, legal and compliance teams should decide under the applicable law.
How Tranexio supports it
Tranexio runs pre-submission compliance screening at counterparty onboarding and at four submission points – contract, order, shipment and payment. A match blocks the transaction and sends it for manual review, and the screening process is logged. External list sources can be connected via the integration hub. See Risk and compliance.