Sanctions screening becomes a customer due diligence measure (Article 27 AMLR)
The AMLR makes verifying whether a customer or beneficial owner is subject to EU targeted financial sanctions part of due diligence. What it means for onboarding, list updates and sectors new to screening.
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Sanctions compliance and AML compliance grew up as separate disciplines, with separate legal bases and, in many institutions, separate teams. Article 27 of the AMLR joins them at the customer level: verifying whether the customer or the beneficial owner is subject to EU targeted financial sanctions is a customer due diligence measure, to be performed at the start of the relationship and whenever the lists change.
What the article requires
- Screening of the customer and every beneficial owner against the EU targeted financial sanctions lists, at onboarding.
- Re-screening when a designation is added or changed, which in practice means continuous screening of the customer base against list updates.
- Records of the screening and of the outcome, as part of the customer file.
Why it matters beyond banks
Financial institutions already screen; the change for them is mostly documentation and the explicit inclusion of beneficial owners. For notaries, lawyers, accountants, real-estate agents, trust offices and dealers in goods the obligation is often new in this form. A notary handling a property transaction must be able to show that the buyer, the seller and their beneficial owners were screened, and when.
Interaction with the EU sanctions framework
The AMLR does not change the sanctions regulations themselves; the prohibitions and the reporting to the competent authority remain where they are. What it adds is the AML-supervisor's view: failure to screen becomes an AML compliance breach, subject to the sanctions RTS, in addition to a breach of the sanctions regulation.
Common gaps
Screening the contracting party but not the beneficial owners; screening at onboarding but not on list updates; relying on a vendor without evidence of the list versions used; and no link between a screening hit and the event-driven review of Article 26.
What to do now
- Confirm that beneficial owners are screened, and that the beneficial-ownership data is complete enough for meaningful matching.
- Keep evidence of list versions and screening timestamps in the customer file.
- Route hits into the event-driven review process and, where warranted, into a report under Article 69.
The dashboard tracks the relevant Guidelines under Client Acceptance; the readiness tracker has a Sanctions Screening block.