Screen for sanctions

Organizations face regulatory pressure to identify customers, associates, and partners that may be subject to economic sanctions or appear on government watchlists. Middesk’s screening capabilities help you comply with Office of Foreign Assets Control (OFAC) requirements and perform comprehensive due diligence by identifying entities on U.S. and global watchlists.

Sanctions and watchlist screening is a critical component of Know Your Customer (KYC) and Anti-Money Laundering (AML) programs, helping prevent transactions with individuals and entities involved in money laundering, terrorism financing, and other prohibited activities.

How Middesk supports sanctions screenings

Middesk automatically screens all businesses created in the system against OFAC sanctions lists. Given that sanctions lists often lack unique identifiers, Middesk leverages identity matching algorithms to determine if an entity matches any sanctioned records.

Middesk provides the status of each individual sanctions list result and flags any potential matches for your review.

Search summary

Middesk summarizes sanctions screening results:

Sanctions list refresh schedule

Middesk pulls OFAC sanctions lists from official government sources daily at 3:00 AM PT. The government website refreshes data at 2:00 AM PT, ensuring Middesk captures the latest updates almost immediately.

A job ingests the lists into the database around 3:30 AM PT. If the lists fail to be pulled or ingested, automated alerting escalates the issue to Middesk engineers for immediate resolution.

How Middesk scores name matches

Middesk uses a string comparison scoring algorithm to output a score (0-100) when comparing business and individual names to sanctions records.

The scoring model follows a two-step process:

1. Identifies potential matches using Levenshtein distance.
2. Scores matches using Jaro-Winkler and Soundex algorithms.

Jaro-Winkler prioritizes matches that start similarly, while Soundex ensures phonetic similarity. A composite score determines if a match exceeds the threshold, flagging the entity as a potential match.

The sanctions score threshold must be between 80 and 100.

Model reference

The types of expected matches vary depending on string length and the distance-based algorithms used in scoring.

Exact match detection

When comparing two names, Middesk first attempts to identify exact matches. Both names are converted to lowercase and split into individual tokens (words).

Middesk filters out:

• Common stop words
• Any tokens less than 3 characters in length
• Any non alpha-numeric characters

A match is considered “exact” if either all tokens from the input name are present in the sanction name (regardless of order) or if the sorted tokens from both names are identical when joined together. For example, given input of John Smith Company and a sanction on COMPANY SMITH JOHN, this is considered an exact match (the tokens match regardless of order).

Example records

To configure your sanctions screening settings, go to the Settings page in the Middesk Dashboard. The configuration selections apply globally across all businesses.

Reduce false positives

Middesk offers several configuration options to reduce false positives:

• Filter by date of birth
• Filter by subcategory (business only, submitted people names, or found people names)
• Select specific lists to search

Filter by date of birth for submitted people

When a date of birth (DOB) is included with submitted people, the model uses DOB as an additional filtering parameter on top of name match scoring.

Filter for submitted and found people

When searching for sanctions records, you can select Business only, Submitted people names, and Found people names (found from Secretary of State registrations).

Select lists to search

Select specific OFAC sanctions lists to search against. Middesk supports the following OFAC sanctions lists:

If you need additional OFAC lists added to the product, contact support@middesk.com.

To see which lists are enabled or available, go to the Middesk Dashboard Settings > Screenings > Sanctions to find more information.

Enhanced screening with global watchlists

Middesk offers enhanced screening to extend coverage beyond OFAC sanctions lists with 5,704 additional sources including state and local law enforcement, international sanctions lists, regulatory exclusions, and criminal databases.

Enhanced screening allows for comprehensive screening on sanctions, criminal, and debarment lists across the globe to reduce your risk of doing business with a sanctioned or high-risk entity.

Enable enhanced screenings

Enhanced screening comes with a recommended set of default lists from reputable global financial agencies. You can also customize it to your compliance program’s needs, with thousands of lists to potentially screen against.

To enable enhanced screenings, include enhanced_screenings in the orders array when creating a business:

$
curl -X POST https://api.middesk.com/v1/businesses \
>
  -H "Authorization: Bearer YOUR_API_KEY" \
>
  -H "Content-Type: application/json" \
>
  -d '{
>
    "name": "Acme Corporation",
>
    "addresses": [
>
      {
>
        "address_line1": "123 Main Street",
>
        "city": "San Francisco",
>
        "state": "CA",
>
        "postal_code": "94105"
>
      }
>
    ],
>
    "orders": [
>
      { "product": "business_verification_verify" },
>
      { "product": "enhanced_screenings" }
>
    ]
>
  }'

To see which lists are enabled or available, go to the Middesk Dashboard Settings > Screenings > Watchlist and Enhanced Screenings to find more information.