Sanctions Screening for Small Businesses: Getting Started

Why Small Businesses Need Sanctions Screening

Many small business owners believe that sanctions compliance is only for large banks and multinational corporations. This is a dangerous misconception. Any business engaged in international trade, cross-border payments, or dealing with foreign counterparties has sanctions compliance obligations.

The penalties for violations apply equally regardless of company size. A small exporter shipping goods to a sanctioned party faces the same legal consequences as a major bank processing a prohibited transaction.

Common Scenarios Requiring Screening

Small businesses should screen in several situations: before accepting a new customer or client, before shipping goods internationally, when receiving wire transfers from foreign sources, when engaging freelancers or contractors from abroad, and when entering into any business relationship with a foreign entity.

Affordable Screening Solutions

Enterprise sanctions screening platforms typically cost hundreds or thousands of dollars per month, putting them out of reach for most small businesses. However, affordable alternatives exist.

Isarud offers a free tier with 10 screenings per month, covering OFAC, EU, UN, and UK sanctions lists. For businesses needing more capacity, the Pro plan at $29 per month includes 500 screenings, PDF reports, and automated re-screening of saved names.

Building a Simple Compliance Program

Step 1: Designate a compliance responsible person, even if it is the business owner.

Step 2: Write a brief sanctions policy stating that all counterparties will be screened before transactions.

Step 3: Choose a screening tool and establish a screening workflow.

Step 4: Document all screenings and maintain records for at least five years.

Step 5: Set up periodic re-screening of existing business relationships.

Red Flags to Watch For

Beyond name screening, small businesses should be alert to warning signs: customers requesting unusual payment routes, transactions involving high-risk jurisdictions, reluctance to provide identifying information, and unusually complex deal structures for the type of transaction.