The Procurement Glossary » Sanctions Screening

Sanctions Screening

Compliance & Risk

Definition

Checking suppliers and their owners against government sanctions and watchlists before and during engagement.

Explanation

Trading with a sanctioned entity carries severe legal penalties. Screening at onboarding and on an ongoing basis — against updated lists — is a mandatory control in due diligence, especially for international suppliers.

Example

Sanctions screening blocks onboarding when a supplier's owner appears on a watchlist.

Related terms

• Know Your Supplier (KYS) — The practice of verifying and continually understanding who your suppliers are, their ownership and their risk profile.
• Due Diligence — The investigation of a supplier's legitimacy, capability, financial health and compliance before engaging it.
• Regulatory Compliance — Adherence to the laws and regulations that apply to buying, importing and operating in a given market.
• Supplier Risk — The exposure a buyer faces from a supplier's potential failure — financial, operational, compliance or reputational.

Frequently Asked Questions

What is Sanctions Screening?

Checking suppliers and their owners against government sanctions and watchlists before and during engagement. Trading with a sanctioned entity carries severe legal penalties. Screening at onboarding and on an ongoing basis — against updated lists — is a mandatory control in due diligence, especially for international suppliers.

Can you give an example of Sanctions Screening?

Sanctions screening blocks onboarding when a supplier's owner appears on a watchlist.

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