Sanctions / TFS / CPF

1. Definition #

Sanctions screening checks whether a customer, counterparty, UBO, controller, asset, vessel, wallet, product, geography or transaction is connected to a designated person, prohibited activity or sanctions evasion risk.

2. Why It Matters #

Sanctions issues can require immediate freeze/no-dealing escalation and may create strict legal obligations. They must not be treated like ordinary adverse media.

3. Common Triggers and Use Context #

• Name or identifier match to UN baseline, internal policy list, or institution-specific sanctions list.
• Ownership/control link to sanctioned person/entity.
• Transaction involves sanctioned sector, product, vessel, wallet, bank or restricted geography under the institution-specific policy.
• PF-sensitive goods, end user or route.
• Attempted payment or onboarding linked to a designated person/entity.
• Customer asks how to avoid sanctions controls.

4. Source Basis #

• SRC-FATF-001: Recommendations 6, 7, 16, 19 and 20.
• SRC-UN-001: UN Security Council Consolidated List.
• Non-UN sanctions programmes should be configured in the institution-specific policy layer if applicable.
• Institution-specific sanctions guidance belongs in internal policy and must be aligned with applicable law and regulator expectations.
• SRC-FATF-007: PF risk assessment and mitigation guidance.

5. Practitioner workflow: sanctions hit #

1. Pause normal approval path.
2. Capture screening result, source list, date/time and match score.
3. Classify match: false positive, possible match, likely match, true match.
4. Compare identifiers: name, aliases, date of birth, place of birth, nationality, address, ID, registration number, corporate identifiers, vessel/wallet/account details.
5. Check ownership/control and acting-on-behalf-of indicators.
6. Check whether the sanctions source is in scope under the institution-specific policy.
7. Escalate possible/likely/true matches according to policy; likely/true must go to MLRO/legal process.
8. Avoid customer communication that could create tipping-off or sanctions circumvention risk.
9. Produce sanctions hit memo.

6. Practitioner workflow: CPF/PF risk #

1. Identify goods, technology, end user, end use, route, banks and intermediaries.
2. Check UN PF-related sanctions sources and any institution-specific sources defined by the institution.
3. Look for PF-sensitive exposure, including sanctioned programmes, restricted end users or evasion patterns relevant under applicable law and institutional policy.
4. Check dual-use or controlled goods indicators.
5. Check transshipment and end-user opacity.
6. Check unusual financing and document inconsistency.
7. Escalate high-risk PF indicators to MLRO.

7. Evidence to collect #

• Screening result and source list.
• Sanctions list entry details.
• Customer/counterparty identifiers.
• Ownership/control documents.
• Transaction documents.
• Goods/end-use/end-user documents where relevant.
• Communications log.
• Analyst match rationale.
• MLRO/legal decision log.

8. Match classification #

9. Red flags #

High#

• Ownership chain includes entity in restricted geography without clear reason.
• Goods route includes transshipment through high-risk geographies.
• Counterparty uses new intermediary after sanctions restrictions.
• Payment route differs from goods route.
• Customer refuses end-user/end-use information.

Critical#

• True sanctions list match.
• Ownership/control by sanctioned person/entity.
• Attempted transaction with designated person/entity.
• Evidence of sanctions evasion or PF-sensitive procurement.

10. Output Pattern #

# Sanctions Hit Memo

Subject: [customer/counterparty/person/entity/asset/wallet]
List/source: [UN/internal/institution-specific]
Match type: [name/entity/vessel/wallet/ownership/control]
Classification: [false positive/possible/likely/true]
Identifiers compared: [list]
Ownership/control analysis: [summary]
Transaction/activity context: [summary]
Immediate risk: [low/medium/high/critical]
Recommended action: [clear/escalate/freeze/no-dealing/legal review]
Tipping-off controls: [instructions]
Source basis: [source IDs]
Evidence index: [links/files/screenshots]

11. Related pages #

• STR / SAR & Tipping-Off
• 15. TBML
• Geographic Risk
• Evidence Pack Templates

12. Proliferation-financing and sanctions-evasion lens#

PF and sanctions-evasion review may require more than a direct list match. Relevant questions include:

• whether goods or services have a sensitive or dual-use context;
• whether end user, end use, route and payment parties are consistent;
• whether ownership, control or acting-on-behalf relationships are obscured;
• whether counterparties, intermediaries or documentation changed after a designation or restriction;
• whether mandatory targeted-financial-sanctions controls apply.

Use Sanctions Evasion Typologies for the defensive evidence and escalation framework. Technical export classification and legal sanctions scope remain with authorised specialist functions.