European Union (EU) sanctions list

Sanctions are an essential part of the EU’s Common Foreign and Security Policy (CFSP) and are used as part of the international effort to combat money laundering, terrorist financing and other crimes financial. To this end, the EU establishes and disseminates to all Member States a list of sanctions which must be included in the AML/CFT programs of financial institutions across the Union.

What is the EU sanctions list?

The EU Sanctions List is a consolidated list of countries, entities and individuals who engage or are suspected of engaging in money laundering or terrorist financing activities – and are therefore subject to economic sanctions by the European Union. EU sanctions are linked to UN Security Council resolutions, but the EU imposes its own stand-alone sanctions – against Russia and Iran, for example – in accordance with its foreign policy objectives. EU sanctions may involve:

• A freeze of financial assets
• Restrictions on market access, trade, investment or technical assistance
• Arms embargoes
• travel bans

EU sanctions are decided by the European Council : each member of the Council must agree unanimously on sanction measures before legislation implementing them can be drawn up. Some, such as the freezing of financial assets, are implemented directly by EU governance. Other sanctions, such as arms embargoes, are implemented by Member States themselves through their national legislation, which means that sanction measures must be transposed into local law.

Who must comply with EU sanctions?

The sanctions imposed by the EU apply to financial institutions and individuals within the territory or under the jurisdiction of the European Union. The sanctions also apply to EU citizens who operate outside EU territory.

To ensure compliance, financial institutions required to comply with the regulations must integrate a search for European sanctions as part of their AML/CFT program when onboarding new customers. Failure to comply with this obligation may lead to financial penalties and criminal proceedings against those responsible. The EU does not take enforcement measures itself, but delegates these measures to the competent authorities of each Member State.

Why is it important to have a sanctions screening and monitoring tool?

To comply with EU AML/CFT regulations, financial institutions in member states must carry out an AML EU sanctions screening for each new customer, but as the list changes frequently, carrying out these screenings manually can be time consuming. and imprecise. In contrast, performing automated checks using a sanctions check tool minimizes the risks of the manual process, easing the administrative burden on employees and, most importantly, helping companies meet the requirements of regulatory authorities.

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