Scope: Potential US, EU and other sanctions connections
Your screening software returns no match. Sales marks the customer approved and prepares the shipment. Later, the bank asks who owns the buyer and why a third party is making the payment.
Sanctions screening and ownership checks need to work together. A name search is a useful control, but it does not answer every question about a transaction.
Identify the relevant jurisdictions
Map the contracting parties, goods, banks, currencies, shipment route and people involved. Ask which sanctions regimes apply to those connections. Do not assume US, EU and UK rules have identical scope or exceptions.
Keep the date and basis of the assessment. Lists and restrictions can change between onboarding and shipment.
Look beyond the immediate counterparty
OFAC’s 50 Percent Rule treats entities owned, directly or indirectly, 50 percent or more in the aggregate by blocked persons as blocked, even without a separate listing. The ownership analysis requires care. OFAC FAQ 401.
EU ownership and control questions need analysis under the applicable EU measures. Do not transplant the US threshold as the complete EU test. Council of the EU sanctions overview.
Request information that explains the actual ownership chain and mark unverified gaps. Repeated company-name changes or unexplained intermediaries should prompt further inquiry rather than automatic approval.
Review the transaction itself
Even an unlisted party may be involved in a restricted activity, sector or destination. Examine the proposed goods, service, end use and payment arrangement. Export controls may impose separate restrictions.
If a concern arises, pause the affected decision and obtain qualified advice. Changing the payer or routing through another country does not resolve the legal issue and may create additional risk.
Keep a defensible decision record
Record sources checked, ownership evidence, questions asked and the approval basis. Establish when the transaction must be screened again and who can authorize release.
Need a transaction-specific sanctions assessment? Contact Jinyuan Law Firm with the parties, ownership information, goods and route. Request an initial risk review and identification of the relevant jurisdictional advice or licensing analysis needed before proceeding.
General information only. Advice depends on the facts and applicable jurisdiction. Contact does not by itself create a lawyer-client relationship. Local-law advice may be needed outside mainland China.
