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European Union Consolidated Financial Sanctions list - More than a list

Thursday, 20 Oct, 2022

Compliance with the EU Consolidated Sanctions list is a top priority for anyone looking to expand their business into EU countries. It is because governments use sanctions to restrict trade with foreign targets, defend international laws, and promote world peace.

Furthermore, sanctions lists play a crucial part in a financial institution's anti-money laundering (AML) policy, influencing how and with whom the institution operates. In no time, PayCEC will get into everything you need to know about this list to grow your business while respecting host country policies.

Why does the EU Consolidated list of Sanctions exist?

Why does the EU Consolidated list of Sanctions exist?

EU Financial Sanctions list: Origin and purpose

In their most idealistic form, sanctions are a nonviolent way to hinder powerful countries from becoming invincible. Economic sanctions can cripple a country's economy while also making it more willing to initiate a negotiation.

The EU imposes economic sanctions on foreign governments to divulge sanctions made by financial institutions within its jurisdiction. The European Union Consolidated Financial Sanctions list includes all sanctions applicable around the world to deter threatening actions.

Sanctions can be imposed by the UN Security Council and then adopted by the EU; however, the European Union imposes sanctions by itself in many cases. Similarly, the Netherlands will sometimes institute sanctions without intervention from the UN or EU.

In contrast to their name, the EU’s sanctions are not punitive but intended to alter policy or activity by targeting third countries, entities, and individuals responsible for allegedly aggressive behaviors.

Objectives of EU Consolidated list of sanctions

Generally, the purposes of sanctions are:

  • change undesirable behavior (e.g., Syria)

  • limit opportunities for undesired behavior (e.g., Russia, extensive restrictions on oil and coal imports)

  • deter other countries from taking an undesired course of action

In particular, the EU Consolidated Sanctions list contains the list of persons, groups, and entities whom Europe forbids from disposing of their economic resources.

For example, in early 2022, Russia launched a “special military operation” in eastern Ukraine. Since then, the EU has approved seven sanctions targeting Russia. The current preventive measures include a freeze of funds, financial assets, and economic resources for an estimated 1,206 Russian individuals and 108 entities.

Types of measures in the EU Consolidated list of Sanctions

EU sanctions may target governments of third countries, as well as non-state companies, groups, organizations, or persons through the following measures:

  • Arms embargoes and restrictions on admission to EU member-states

  • Asset freezes, restrictions on imports and exports, are examples of economic measures

The EU Consolidated Sanctions list has been meticulously designed to correspond to its goals. Therefore, the measures aim at those in charge of the policies or actions the EU wants to influence while minimizing unintended consequences.

Where do EU sanctions apply?

Despite having an inherent impact as a foreign policy tool against non-EU countries, the obligations are not applicable outside the European Union. In other words, they bind individuals or businesses within the EU's jurisdiction.

The investigation of potential non-compliance is the responsibility of the Member States. When detecting a sanction violation, these people must impose effective, proportionate, and dissuasive penalties on the breacher.

So if you are planning to start a business in EU countries, you should first understand the EU Consolidated list of sanctions to avoid committing criminal activities, and be able to sort out customers that do not abide by national legislations.

The consolidated list of EU Sanctions

How to use the consolidated list of EU sanctions?

The European Union Consolidated Financial Sanctions list contains identifying information of sanctions targets. To access the list, which includes details of the prohibited activities and restrictions, firms must register on the official website of the European Commission.

On December 7, 2020, the Council of the European Union adopted a new sanctions regime to take restrictive measures against serious human rights violations and abuses.

Based on the previous work of the UK and several countries, the regime entails travel bans and a freeze of assets, regardless of where human rights violations happened. Its measures follow the 2012 ‘Magnitsky Act’ sanctions introduced by the US.

How to comply with the consolidated list of EU sanctions?

It is pivotal to know how to comply with the sanctions list

It is pivotal to know how to comply with the sanctions list

Wherever a company is located, as long as it operates within EU jurisdiction, compliance with the EU Consolidated Sanctions list is a MUST.

However, the list is getting longer, making it harder and harder to screen customers breaching it. Not only do firms have to detect sanctions violations quickly, but to ensure that they do not cause regulatory costs that limit efficiency by generating many false accusations.

With that in mind, obligated entities within the EU should consider the following factors to comply with EU Consolidated Financial Sanctions list:

Accuracy and reliability

Sanctions lists are regularly enumerated with new designations added and withdrawn. Firms should catch up with the latest change of the consolidated list data to ensure accuracy and avoid false positives.

Sanctions relevance

EU sanctions vary by the regime under which they are imposed. For example, sanctions imposed under the GHRSR may target a particular group of individuals, whereas sanctions imposed under the autonomy regime may target a whole country.

Firms should be fully aware of how these sanctions affect their business and their customers.

Customer data

To maximize accurate sanctions screening, firms should build solid customer data. But before that, they need appropriate customer due diligence (CDD) at the start of their relationships with customers to understand the sanction risks they may pose.

Customer risk profiles should be complemented with secondary identifiers and information, so that firms can improve insight in the event of duplicate results or remedy false positives properly.

Naming conventions

The names of entities and individuals on the EU Consolidated Financial Sanctions list may not obey Western naming conventions, increasing the risk of false positives and negatives during a screening process.

Therefore, Consolidated List screening solutions must take into account the use of ethnic names, nicknames, and aliases.

Ongoing monitoring

The sanctions scene frequently changes, with designations added, modified, or withdrawn.

With this in mind, firms should strive to continuously verify their customers' sanctions exposure, including monitoring customer transactions to ensure they are not working with any sanctioned third parties.

Entrepreneurs should devise methods to track changes in their customers' Politically Exposed Person (PEP) status, which may be particularly relevant to their sanctions designation.

Smart screening Solutions

To comply with the consolidated list of EU sanctions or similar international sanctions requirements, firms should have an effective technology integration in their screening solution.

Aside from increasing the speed and accuracy of the screening process and lowering the risk of false positives and human error, technology allows businesses to manage massive amounts of data required by screening protocols and adapt to changes as designations are introduced and removed on an ongoing basis.

Doing business in EU with PayCEC

The advantages of working with PayCEC

The advantages of working with PayCEC

Along with other well-loved features, PayCEC also provides a variety of added-value services (VAS) to help enterprises enter foreign markets and optimize their global business. Here’s what we do:

Corporate Services

PayCEC offers a comprehensive range of company formation services to clients in five markets, including international company formation and post-companies-formation support in legal services and corporate governance.

Account Opening Assistance

PayCEC provides banking support services in several jurisdictions. Depending on their preferences, clients can open an account at any bank or choose our recommended choices, which are among the best international branch networks.

Accounting & Auditing Service

PayCEC enables businesses to evaluate performance such as earnings, business expenses, business worth, and areas for improvement to increase profits.

Private Client Services

PayCEC helps businesses prevent the universal challenge of protecting your wealth, legacy, and pass on your family businesses and wealth to your successors and dedicate to philanthropic causes.

Investments

PayCEC offers a variety of corporate, administrative, and fiduciary services for investment funds to ensure that our clients can set up and operate their fund effortlessly in any location around the world.

Advisory Service

PayCEC helps businesses prevent the universal challenge of protecting your wealth, legacy, and pass on your family businesses and wealth to your successors and dedicate to philanthropic causes.

E-commerce

PayCEC assists entrepreneurs to set up your e-commerce store in minutes with shipping, tax, payment, and advertising options ready. With all the modern service to help you manage and run your online business with hassle-free efforts.

Why PayCEC?

To ensure that the latest details about your customers are available, PayCEC periodically reviews the European Union Consolidated Financial Sanctions list 2022, and follows up with the official EC portal to minimize your risk of breaching sanctions.

We only accept payments from new merchants after completing Customer Due Diligence measures, such as identity verification, address, nature and location of business activity, profession, source of funds, and so on.

Customer information and account opening details will be kept confidential and will not be disclosed. Your data will be safe with PayCEC privacy policy .

Please review our most frequently asked questions about the EU Financial Sanctions list, read in entirety to fully understand our policies, or check out the latest updates in the EU Financial Sanctions list.

Read more:

About PayCEC

PayCEC was established in response to the growing need of businesses to accept online payments more quickly and easily. In the new media era, our payment flow has evolved to work seamlessly and effectively across all platforms and devices. We pride ourselves on combining superior technology with first-class customer service.

PayCEC is a truly global payments platform that not only allows customers to get paid but also withdraws funds to their business accounts in various currencies.

We have created an open and secure payments ecosystem that people and businesses choose to securely transact with each other online and on mobile devices.

PayCEC Team

Frequently Asked Questions

Sanctions can be imposed by the UN Security Council and then adopted by the EU; however, the European Union imposes sanctions by itself in many cases. Similarly, the Netherlands will sometimes institute sanctions without intervention from the UN or EU.

According to Eversheds Sutherland , the measures include:

  • The freezing of funds and economic resources, visa or travel restrictions
  • Arms embargoes, embargoes on equipment that could be used for internal repression, other export and import controls, and flight bans.
  • A prohibition on the provision of financial services, including prohibitions on the export of certain products, has also been used, as have investment prohibitions.
  • Sectoral bans or measures have also been used to prevent the misuse of equipment, technology, or software for monitoring and interception of the Internet or other forms of communication.

The number of embargoed countries in the EU Consolidated Financial Sanctions list is not limited and even growing. To access the list, which includes details of the prohibited activities and restrictions, you should create an account on the official website of the European Commission.

In their most idealistic form, sanctions are a nonviolent way to hinder powerful countries from becoming invincible. Economic sanctions can cripple a country's economy while also making it more willing to initiate a negotiation.

The EU imposes economic sanctions on foreign governments to divulge sanctions made by financial institutions within its jurisdiction. The European Union Consolidated Financial Sanctions list includes all sanctions applicable around the world to deter threatening actions.

In contrast to their name, the EU’s sanctions are not punitive but intended to alter policy or activity by targeting third countries, entities, and individuals responsible for allegedly aggressive behaviors.

Yes, it does. For example, On June 22, 2018, the European Union imposed a $3-billion tariff on 180 US goods. On June 5, 2018, Mexico imposed a $3-billion tax on imports of steel, pork, cheese, apples, and other items from the US.

Currently, sanctions are imposed by three major authorities: the United Nations, the European Union, and the Organization for Security and Cooperation in Europe (OSCE).

Generally, the purposes of sanctions are:

  • change undesirable behavior (e.g., Syria)
  • limit opportunities for undesired behavior (e.g., Russia, extensive restrictions on oil and coal imports)
  • deter other countries from taking an undesired course of action

In particular, the EU Consolidated Sanctions list contains the list of persons, groups, and entities whom Europe forbids from disposing of their economic resources.

For example, in early 2022, Russia launched a “special military operation” in eastern Ukraine. Since then, the EU has approved seven sanctions targeting Russia. The current preventive measures include a freeze of funds, financial assets, and economic resources for an estimated 1,206 Russian individuals and 108 entities.

The number of embargoed countries in the European Union Consolidated Financial Sanctions list is not limited to 5. To access the list, which includes details of the prohibited activities and restrictions, you can register on the official website of the European Commission.

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About us

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We are honored to serve as your reliable business partner and financial service provider in the industry and other business-related services. With the help of our professional staff, to help merchants to achieve their goals for the development and expansion of the international business market.

Our payment flow has developed in the e-commerce world to perform seamlessly and effectively across all platforms and devices. We take pleasure in combining technology with customer service, to solve your concerns at the moment.

PayCEC is a fully worldwide payment network that not only allows merchants to be paid immediately and securely, but also allows them to withdraw money in multiple currencies to their company accounts.

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