Performing such checks is extremely complex and ideally involves the use of IT-supported systems such as KYC software. When taking on new customers or suppliers it is essential to establish immediately whether they are on sanctions lists, which would prohibit a business relationship right from the start. This sanctions list information is especially complex because it originates from various countries and is constantly updated. It is therefore advisable to make use of information service providers, who bundle this information and keep it up-to-date constantly.
However, a one-off check is not enough. Customer and supplier relationships must be monitored continuously because the entries on the lists can change. Therefore, IT-supported monitoring of this data is indispensable.
IT solutions can check automatically whether there are correlations between the data of your customers and suppliers and the sanctions lists being checked. Any match found will be presented to the relevant employees for further investigation because not all such matches are unambiguous. As a rule, the automated check is followed by manual assessment for a small proportion of the companies being investigated.
If checks against sanctions lists are being performed, it is also recommendable to check for business relationships with politically exposed persons. There are lists for this as well. Performing this measure helps to avoid bribery and assists your company in preventing the risk of sanctions for such business relationships, which could result in considerable negative effects.
The implementation of these processes makes it possible for your company to carry out comprehensive evaluations of your business partners in a coordinated manner, especially in the area of credit management. You thereby contribute actively to the minimization of risks and compliance with international law.