Lithuania: Secure your business – effective customer screening against sanctions risks

published on 29 January 2024

In general, customer screening is an essential step in the fight against financial crime, which can be divided into three main categories: Adverse media screening, PEP screening, Sanctions screening. While the need to conduct adverse media, PEP and sanctions screening is primarily the focus of financial institutions (banks, fintech's, etc.), sanctions screening is a key element for any company to avoid fines, reputational damage, and sanctions-related regulatory violations.

Companies at increased risk of sanctions violations may include:

Financial institutions
Companies involved in international trade (import and export)
Multinationals (companies with operations in multiple countries and continents)
Shipping and logistics companies
Companies in the energy sector (oil, gas companies)
Technology companies (especially if they develop applications for dual-use goods)
Companies in the defence industry

Whilst manually checking the sanctions list can be a useful tool to ensure that a company is not doing business with a sanctioned entity, manually checking each customer is a much more time consuming and risky approach, as it's important to note that if a company is at least 50 percent controlled by a sanctioned entity/beneficial owner, the company itself may be considered sanctioned under EU, UK or OFAC regulations.