
UN Sanctions List: What Every Business Owner Must Know

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Businesses must navigate a web of rules and regulations whilst onboarding customers, as one misstep could have serious consequences. This is particularly true when they are establishing a relationship with sanctioned customers. Dealing with these parties can put a corporation at risk as they potentially threaten national security. Onboarding a sanctioned customer could end up in fines, regulatory penalties, safety violations, and even charges for criminal activity. As a result, businesses must have a proactive approach to compliance and exercise vigilance when it comes to identifying and screening new customers.
The UN Sanctions List, also known as the United Nations Security Council (UNSC) Consolidated List, includes individuals and organisations subject to sanction measures. The Security Council considers and formulates the sanctions issued by the UN under Article 41, Chapter VII of the UN Charter.
The implementation of any sanction needs the existence of a Security Council Resolution that defines what concrete steps to be taken. These measures involve asset freezes, market access limitations, arms embargoes, travel restrictions, etc.
The sanctions list published by the UN is divided into two parts:
Every section’s entry is arranged alphabetically. The site of the relevant UN sanctions list committee, which is in charge of the specific sanctions regime, provides more information about the basis for each sanction listing. Each member state is in charge of enforcing sanctions and penalties for non-compliance, and they have the power to impose severe monetary fines on people and organisations and bring criminal proceedings against those responsible for the violation.
The upholding of global peace and security is the primary duty of the UNSC. It has 15 members, each with one vote (5 permanent members with veto power—China, France, the US, Russia, and the UK) and 10 non-permanent members. The Charter requires All UN members to abide by Security Council decisions, especially any sanctions the council imposes.
Sanctions imposed by the Security Council have several objectives. There now exist four main categories:
The actions are intended to change bad behaviour (for example, when a regime breaches human rights), reduce possibilities for undesirable behaviour, and stop other nations from taking undesirable actions.
All the member states of the UN must comply with the UNSC Consolidated List, which means that banks and financial firms operating in those countries must include a UN sanctions check as a component of their AML compliance programme. As the UN doesn’t enjoy any direct legislative power to impose sanctions on its member states, the domestic government is expected to introduce and implement regulations. They must ensure their mandated businesses include UN sanctions screening in their monitoring processes.
Companies must have efficient sanction screening procedures to comply with AML standards and minimise the risks involved in doing business with entities or people who have been sanctioned. Consider the following best practices when developing sanction screening procedures:
Screening each client and their transactions manually can be challenging, but Shufti Pro has the ability to eliminate this hassle. Our AI-powered AML solution helps businesses identify sanctioned individuals, firms, and countries to comply with regulations.
Here’s what Shufti Pro’s AML solution brings to the table:
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