EU sanctions screening: obligations and how to check a counterparty
Sanctions screening is the check that a customer, supplier, bank, vessel or beneficial owner is not subject to restrictive measures before you trade with them. In the EU the core prohibition sits in Council Regulation (EU) No 269/2014: the funds and economic resources of a designated person are frozen, and nothing may be made available to them directly or indirectly. Sectoral measures against Russia sit separately in Regulation (EU) No 833/2014.
The Dutifi Sanctions Screener checks a name against OFAC, EU and UN designations and returns the matching entries with their identifying details, so a hit can be confirmed or dismissed rather than guessed at.
What the prohibition covers
- Funds — money, deposits, receivables, securities and similar financial assets.
- Economic resources — assets of any kind that are not funds but can be used to obtain funds, goods or services. Physical goods fall here.
- Directly or indirectly — the limb that catches ordinary trade. A payment routed through, or goods delivered to, an entity owned or controlled by a designated person can breach the prohibition.
Breach is a matter of national criminal or administrative law in each member state, so the consequences of getting it wrong differ across the EU even though the prohibition itself is uniform.
Frequently asked questions
Who has to screen counterparties against sanctions lists?
Every natural and legal person in the EU, and every entity doing business in the EU, must comply with EU restrictive measures. The obligation is not limited to banks or to licensed businesses, and it does not depend on company size. An EU importer or exporter is bound by it in the same way as a financial institution.
What does an EU asset freeze actually prohibit?
Under Council Regulation (EU) No 269/2014 the funds and economic resources of a designated person are frozen, and it is prohibited to make funds or economic resources available to them, whether directly or indirectly. The indirect limb is what catches ordinary trade: paying a supplier that is owned by a designated person can breach the prohibition even when the designated person is nowhere on the contract.
Which lists should be screened?
For an EU operator the binding list is the EU consolidated list of persons and entities subject to restrictive measures, which implements the relevant Council regulations. UN Security Council designations are implemented into EU law and are captured there. US OFAC lists, including the SDN list, are not EU law but apply where there is a US nexus — for example US-origin goods, US dollars clearing through a US bank, or a US person involved in the transaction.
Does the 50 percent ownership rule apply in the EU?
The EU applies an ownership and control test rather than a single bright line. Under EU guidance an entity owned by more than 50 percent by a designated person is normally treated as one to whom funds and economic resources may not be made available, and control can also be established below that threshold on other criteria. US OFAC applies a stricter arithmetical rule: an entity owned 50 percent or more, in aggregate, by one or more blocked persons is itself blocked, whether or not it is separately listed.
Is a name match enough to block a transaction?
No. A name match is the beginning of the assessment, not the conclusion. Common names produce false positives, and transliteration from Cyrillic or Arabic script means the same person may appear under several spellings. A screening result should be resolved against the identifying details in the designation itself — date of birth, place of establishment, passport or registration numbers — before a transaction is stopped or released.
How is sanctions screening different from export control and from PEP checks?
Sanctions screening asks who you are dealing with. Export control, under Regulation (EU) 2021/821 for dual-use items, asks what you are shipping and where. Politically exposed person checks belong to anti-money-laundering law, principally Directive (EU) 2015/849, and identify people who carry higher corruption risk rather than people who are prohibited. The three regimes are separate: clearing one says nothing about the others.
What records should be kept?
Keep evidence that the screening was performed, against which list version, on what date, and how any match was resolved. Sanctions lists change frequently, so a screening result is only evidence of the position on the day it was run. Being able to show a dated, list-versioned record is what distinguishes a documented compliance process from an assertion that a check was done.
Related checks
- Export licence check — dual-use control under Regulation (EU) 2021/821.
- Dual-Use-Güter (Deutsch) — the same regime, explained in German.
- TARIC tariff lookup — duty rates and measures for a commodity code.
- AEO status guide — the trusted-trader programme whose security criteria include counterparty screening.
- AI Customs Broker — specific cases, answered with sources.