Sanctions Screening 101: Navigating PEPs and SDNs
Understand the fundamentals of sanctions screening, PEPs, SDN lists, and why robust automated approaches are critical for modern crypto businesses.
Sanctions compliance is no longer a localized issue. For digital asset businesses, navigating the global web of designated entities is a daily operational requirement.
What are PEPs and SDNs?
Politically Exposed Persons (PEPs) are individuals holding prominent public positions. They present a higher risk for involvement in bribery or corruption.
Specially Designated Nationals (SDNs) are individuals, groups, or entities targeted by sanctions regimes (like OFAC in the US), meaning their assets are blocked and US persons are generally prohibited from dealing with them.
Global Sanctions Regimes
While OFAC is the most prominent, businesses must also navigate EU consolidated lists, the UK's OFSI, and UN Security Council resolutions.
In crypto, this extends beyond traditional names to include designated cryptocurrency addresses, mixers, and associated entities.
Automated vs. Manual Approaches
Manual screening is prone to human error and cannot scale with transaction volume. Automated systems use fuzzy matching to account for naming variations and transliterations.
However, automation generates false positives. A mature compliance program uses automation for the first pass and skilled analysts for adjudication.
Enhance Your Screening Workflows
Aletheia integrates global sanctions lists and designated wallet addresses directly into your investigative environment for rapid, accurate screening.