What You Need to Know About Sanction Checks

Many may know that there are procedures within an employment process that must be adhered to, for example, right-to-work checks or credit checks, but are often unaware of what these checks consist of:

  • Criminal record checks, for example, are a widely-recognised procedure in most employment processes, but many are unknowing of smaller checks offered in conjunction with criminal record checks, such as sanction checks; these are required depending on the job role.
  • Sanction checks form one section of a wider background check. Employers will sometimes opt to apply for sanction checks on employees prior to their start at an organisation to ensure they are not employing an individual who may cause issues, such as fraud or corruption within the business.

In the following blog, we will discuss all you need to know about sanction checks and how they may be relevant to you in the future.

What is a Sanction?

A sanction is often recognised as a penalty implemented by bodies such as the government to deter individuals from committing crimes. It is a widely used measure of prevention for those who disobey the law, and it is intended to deal with people who are listed under sanctions lists, known as “designated people”.

For some individuals or organisations known to be a target, the Financial Sanctions Orders ban them from completing transactions with others.

In some cases, the order bans firms from completing any monetary transactions with those on the list, making it a criminal offence to do so. 

Those who knowingly complete and enter into transactions with the organisations on the list can be given up to seven years in prison.

What is a Sanction List?

There are several reasons you may be placed on a sanction list. The following criminal activities may be cause for ending up on a sanction list.

Terrorist Activity and Financing of Terrorists

Funding any activities that relate to or support the execution of terrorist activities. These can range from small crimes all the way through to organised crimes such as trafficking drugs, weapons or human beings.

Illegal construction and/or financing of weapons and arms

Funding the production or transport of illegal or unregistered weapons is a crime that can result in an individual or organisation appearing on a sanction list.

Human rights violations

Those committing offences towards others which violate their human rights, such as cruel and unjust treatment, arbitrary deprivation of life, slavery, human trafficking and forced labour, and advocacy of racial or religious hatred, for example, are eligible to appear on a sanction list.

Money Laundering

The process of money laundering, i.e. holding money and processing money in a way which disguises the origin of the original money source, is another way a place on the sanction list can be issued.

Who are Politically Exposed Persons (PEPs)?

Politically Exposed Persons (PEPs) are typically defined as individuals with a specific position in public life, mainly those who have obtained this position within the last 12 months.

PEPs are often deemed to be susceptible to bribery and corruption due to their increased position and influence. PEPs include not only the individual themself but their close family and friends too. 

Some information that may raise red flags may be using corporate vehicles to obscure ownership by PEPs and doing business with PEPs connected to higher-risk countries, industries or sectors. Another cause for concern may be information being provided by the PEP being inconsistent with other publicly available information (such as asset declarations and published official salaries).

Being Found Guilty of Breaching Sanctions

If you are found guilty of breaching a sanction in the UK, you could face serious consequences as a result. The penalty for doing so, as mentioned above, can reach a sentence in jail of up to seven years, dependent on the crime’s severity and could also make you liable to a hefty fine. 

Some financial institutions have been subject to multi-million-pound fines for committing serious offences which breach the rules of sanctions.

Applying for a Sanction Search with Eurocom C I

Here at Eurocom C I, we understand the importance of completing checks in a timely manner to ensure you can begin onboarding your new staff as soon as you can. We also pride ourselves in the thorough and intricate detail we pay to all of our services.

If you would like more information on our sanction checks, please visit our AML and sanction checks page or contact us and speak with our team of experts.