Sanctions
Sanctions screening checks customers and transactions against multiple sanctions lists from different jurisdictions (OFAC, EU, UN, UK) to prevent prohibited activity and avoid severe regulatory penalties. This use case addresses managing frequent list updates, reducing false positives from name matching through enhanced entity resolution, identifying indirect connections to sanctioned entities, providing real-time screening for transactions, and maintaining complete audit trails of screening decisions.
The Challenge¶
Financial institutions face significant challenges in sanctions screening:
- Multiple sanctions regimes — Must comply with OFAC (US), EU, UN, UK, and other jurisdictions' sanctions
- Frequent list updates — Sanctions lists change daily as new individuals and entities are added or removed
- Name matching complexity — False positives from common names, transliterations, and name variations
- Entity resolution — Determining if a customer matches a sanctioned entity requires sophisticated matching
- Indirect connections — Must screen not just direct customers but also beneficial owners and related parties
- Real-time requirements — Transactions must be screened in real-time to prevent prohibited activity
- Regulatory penalties — Severe fines and criminal penalties for sanctions violations
- Data quality — Sanctions lists may have incomplete or inconsistent data
Traditional screening approaches rely on periodic batch checks that may miss recent additions or fail to provide sufficient context for accurate matching.
Why EKG is Required¶
Enterprise Knowledge Graphs provide powerful sanctions screening capabilities:
- Multi-list integration — Connect sanctions lists from multiple jurisdictions and maintain unified view
- Enhanced entity resolution — Use relationship context to disambiguate individuals and entities with similar names
- Relationship analysis — Identify indirect connections to sanctioned entities through business or family relationships
- Temporal tracking — Maintain historical sanctions data and track changes as lists are updated
- Real-time screening — Continuously screen customers and transactions as sanctions lists are updated
- Contextual matching — Reduce false positives by considering additional identifying information (dates of birth, addresses, etc.)
- Network analysis — Identify entire networks connected to sanctioned entities
- Compliance documentation — Maintain complete audit trail of sanctions screening and decisions
Business Value¶
- Regulatory compliance — Meet mandatory sanctions screening requirements and avoid severe penalties
- Risk mitigation — Prevent prohibited transactions and avoid association with sanctioned entities
- Reputational protection — Avoid damage from sanctions violations and negative media attention
- Operational efficiency — Reduce false positives and manual review effort through intelligent matching
- Real-time protection — Screen transactions in real-time to prevent sanctions violations
- Cost reduction — Avoid fines and penalties that can reach billions of dollars