Definition
Sanctions Screening
Checking every investor against government sanctions and watch lists before accepting their capital.
Sanctions screening is the check that an investor, their beneficial owners, and their banks do not appear on government restriction lists: in the US, the OFAC Specially Designated Nationals list, alongside EU, UK, and UN equivalents. Unlike much of compliance, sanctions exposure is strict liability: there is no accredited-investor-style safe harbour for having accepted funds in good faith, and penalties attach to the transaction rather than to the intent. Screening runs at onboarding and is re-run periodically, since lists change and an investor who cleared last year may not clear today. For SPVs raising across many jurisdictions it is the check most likely to stop a wire, so run it at commitment rather than at close.