In 2024, global anti-money laundering (AML) fines totaled approximately $4.6 billion, with North America accounting for 95% of these penalties. This figure underscores the escalating regulatory scrutiny on financial institutions. A critical component of AML compliance is watchlist screening, aka verifying whether customers or business partners appear on crime, sanctions or politically exposed persons (PEP) lists.
This article delves into the nature of these watchlists, their significance and strategies to streamline the screening process, ensuring compliance without imposing excessive friction on customers or operational burdens on employees.
What Is AML Crime and Sanctions Watchlist Screening?
Watchlist screening is a core component of any AML compliance program. Businesses must check whether customers or partners appear on official databases of criminals, sanctioned individuals, suspected terrorists or politically exposed persons (PEPs). These lists, maintained by authorities like Interpol, the EU and the FBI, help prevent financial crimes and ensure companies avoid engaging with high-risk individuals.
To do this effectively, sanctions crime list screening software must handle name-matching complexities like phonetic similarities, spelling variations, transliterations and different scripts. This minimizes false positives that interrupt legitimate users and false negatives that let high-risk individuals slip through, ensuring both compliance and a smoother customer experience.
Why Crime Watchlist Screening Is Important
If your company is subjected to AML requirements, crime list screening is your regulatory obligation. FIf your company is subject to AML requirements, crime list screening is your regulatory obligation. Failing to perform appropriate checks at the onboarding stage could result in the following:
- Hefty compliance fines: AML fines are designed to be prohibitive for financial institutions, which is why AML costs are often measured in hundreds of thousands of dollars.
- Becoming instrumental in money laundering: You must also consider the legal and operational consequences of allowing criminals to use your product or service, which means you are helping money laundering.
- Reputational damage: Being caught not being AML compliant will hurt your reputation in the eyes of investors, business partners, employees and stakeholders, even your public image.
However, a key challenge of watchlist screening is understanding how to do it properly without adding too much friction to the onboarding journey. You want to minimize false negatives, as they amount to non-compliance, without getting too many false positives, which can interrupt the customer journey and clog up your workflow, as each has to be checked by a human.
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Examples of AML Crime and Sanctions Watchlists
Governments and law enforcement agencies around the world maintain public crime and sanctions watchlists, while some AML software providers bundle proprietary or aggregated versions with their software. Key examples include:
- Interpol Red Notices: Alerts issued to locate and provisionally arrest individuals pending extradition.
- FBI Most Wanted: A public list of fugitives sought by the U.S. Federal Bureau of Investigation.
- EU Consolidated Sanctions List: A unified record of individuals, groups and entities subject to EU sanctions.
- SECO Sanctions List: Managed by Switzerland’s State Secretariat for Economic Affairs, covering embargoed individuals, entities and vessels.
- OFAC Sanctions Lists (e.g. SDN List): Maintained by the U.S. Treasury’s Office of Foreign Assets Control, including individuals and entities involved in terrorism, narcotics trafficking and more.
- FINCEN Lists: Issued by the U.S. Financial Crimes Enforcement Network to enforce the Bank Secrecy Act and flag suspicious actors.
Dozens of additional national and regional watchlists exist globally, depending on jurisdiction. Effective AML screening tools should account for this diversity to ensure full compliance across geographies.
How to Check Crime and Sanctions Watchlists
There are multiple ways to check whether an individual or business appears on crime and sanctions watchlists, ranging from manual searches to automated screening tools. While public databases like those from Interpol or the EU are available for direct access, manually searching each one quickly becomes time-consuming and unscalable, especially for companies operating across multiple jurisdictions.
This is where sanctions crime list screening software becomes essential. These tools automate the process by scanning a person’s name against numerous watchlists simultaneously. They also offer advanced features to improve accuracy and reduce compliance risk. When choosing a solution, consider:
- Database coverage: Does it include the jurisdictions and regulatory bodies relevant to your business? A provider focused only on US and UK data may be insufficient if you operate globally or in APAC, LATAM or Africa.
- Name matching intelligence: Look for software that accounts for spelling variations, transliterations, non-Latin scripts and common aliases or nicknames.
- False positive management: Advanced solutions use fuzzy matching, semantic analysis and confidence scores to reduce false positives and avoid missed alerts.
- Integrated checks: Many AML tools allow you to run watchlist screening alongside PEP, KYC, and fraud checks, streamlining onboarding and improving operational efficiency.
Automated screening ensures a more reliable compliance process and significantly reduces the manual workload and risk of human error.
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How SEON Checks AML Crime Lists
SEON’s customer screening software lets you detect risk and block fraudsters earlier in the user journey, before reaching expensive IDV and KYC checks. With watchlist screening built in, SEON automatically checks users against sanctions, crime, PEP and RCA watchlists using fuzzy matching and multiple character set support to minimize false positives and false negatives.
You can also monitor risk continuously with AML transaction monitoring and payment screening, all from the same platform. By unifying fraud prevention and compliance, SEON gives you a more efficient way to stay secure, cut costs and streamline decision-making.
Frequently Asked Questions
Known AML crime lists include Europol fugitives, Interpol’s Most Wanted List, and the FBI’s Most Wanted & Fugitives.
Crime watchlists focus on individuals who have been convicted of crimes, while sanctions watchlists contain the names of individuals who are prevented from doing business in certain countries. Note that these watchlists are often checked at the same time – especially when you’re doing so with automated AML tools.
AML tools must check for names on databases. Unfortunately, names are a difficult type of data to handle, because of spelling variations, namesakes, and various alphabets. This is why an AML screening tool will usually let you perform a fuzzy search for names that include phonetic similarity, transliteration differences, or hyphenation. In essence, this helps provide more accurate results.
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