Non-financial companies, including manufacturers, exporters, energy firms, technology providers, logistics operators, and professional services, are increasingly expected to comply with global sanctions regulations. Even without direct involvement in banking or payments, these organizations can face serious penalties for doing business with sanctioned individuals, entities, or countries.
Sanctions, established by authorities such as the United Nations Security Council, U.S. Office of Foreign Assets Control (OFAC), European Union, and the UK Office of Financial Sanctions Implementation (OFSI), prohibit certain trade, financial transactions, or relationships. Non-compliance can result in severe fines, export bans, reputational harm, and supply chain disruption.
To protect operations and maintain trust, non-financial organizations must implement a sanctions screening process that covers customers, suppliers, and third-party partners across every region where they operate.
Key Principles of Sanctions Screening
Sanctions screening for non-financial entities should be practical, risk-based, and integrated into day-to-day operations. Effective programs follow these core principles:
- Risk-based approach: Prioritize screening based on supplier, customer, and jurisdictional risk exposure.
- Comprehensive list coverage: Screen against global sanctions regimes (UN, OFAC, EU, OFSI) and any country-specific lists tied to your markets.
- Automation and accuracy: Use technology that can detect aliases, transliterations, and spelling variations to reduce false positives.
- Documentation and accountability: Record reviews, decisions, and escalation procedures for audit readiness.
- Training and awareness: Equip procurement, legal, and compliance staff with regular training on sanctions requirements.
Learn more about key sanctions lists and compliance expectations.
Sanctions Screening Checklist for Non-Financial Companies
This checklist outlines essential controls and procedures to help non-financial organizations build or strengthen their sanctions compliance programs.
1. Governance and Policy
| Checklist Item | What to Do |
| Define a sanctions compliance policy | Create a written policy outlining governance, roles, and escalation procedures related to third-party screening. |
| Determine applicable regimes | Identify which sanctions programs apply to your business activities and geographies. |
| Classify third-party risk | Assess suppliers, distributors, and customers based on their geographic and business risk. |
| Update sanctions lists regularly | Subscribe to reputable data sources to ensure near real-time updates. |
2. Data Collection and Integration
| Checklist Item | What to Do |
| Collect identifying data | Gather relevant information (names, addresses, registration numbers, ownership details) for all counterparties. |
| Integrate screening into procurement and onboarding | Embed screening into vendor onboarding, contract management, and customer due diligence workflows. |
| Use multiple list sources | Check against consolidated global and domestic sanctions lists relevant to your trade or operations. |
| Ensure data quality | Maintain clean, standardized, and complete data to improve match accuracy. |
3. Screening Execution
| Checklist Item | What to Do |
| Implement effective screening tools | Use software capable of detecting fuzzy matches and updating data automatically. |
| Apply a risk-based configuration | Focus enhanced due diligence on higher-risk jurisdictions, industries, or transactions. |
| Conduct real-time or pre-engagement checks | Screen third parties before onboarding and periodically during the relationship. |
| Document reviews and actions | Record all alerts, investigations, and outcomes for compliance evidence. |
| Establish escalation procedures | Create a defined process for investigating and clearing potential matches. |
Explore Alessa’s Sanctions & Watchlist Screening solution.
4. Monitoring and Maintenance
| Checklist Item | What to Do |
| Periodic re-screening | Re-evaluate all vendors, customers, and partners when lists update or at set intervals. |
| Continuous list monitoring | Automatically detect new sanctions or delistings affecting your counterparties. |
| Regular testing and validation | Verify system performance and ensure screening logic is current. |
| Staff training and awareness | Provide regular training on sanctions, export controls, and incident escalation. |
| Independent audits | Conduct periodic reviews to identify process gaps and ensure compliance alignment. |
5. Handling Matches and Alerts
| Checklist Item | What to Do |
| Investigate potential matches | Validate whether the alert is a true or false match using additional data. |
| Escalate and decide | Follow internal decision trees to clear, block, or report the entity or transaction. |
| Maintain records and reporting | Retain full documentation for audits and regulatory inquiries. |
| Report confirmed violations | Follow applicable laws and notify the appropriate authorities where required. |
Moving Forward with Sanctions Screening
Sanctions compliance is not limited to financial institutions, it’s an essential component of good corporate governance. By embedding screening into procurement, sales, and partner management processes, non-financial companies can minimize compliance risk and demonstrate ethical business practices.
By following this checklist, your organization can:
- Safeguard supply chains and business relationships.
- Prevent reputational and financial damage from inadvertent sanctions breaches.
- Build a culture of compliance that supports sustainable growth.
With Alessa, organizations can automate sanctions screening across customers, suppliers, and transactions; integrating compliance into everyday operations while reducing false positives and manual workload.
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