Why Should You Automate Sanctions and Watchlist Monitoring?

If a third party, or their key executives, were added to a sanctions list tomorrow, how quickly would you know? 

If your answer includes words like “manual process,” “periodic check,” or “we probably wouldn’t,” you’re not alone. 

But in today’s geopolitical climate, real-time sanctions and watchlist screening isn’t a nice-to-have, it’s a regulatory and reputational must-have. And thankfully, it’s one of the most automation-ready functions in your Third Party Risk Management (TPRM) toolbox. 

The Growing Sanctions Landscape 

Governments and global bodies update sanctions and enforcement lists frequently, sometimes daily. These include: 

• OFAC (U.S. Treasury Department) 

• EU & UK Sanctions Lists 

• UN Sanctions List 

• State-level or regional enforcement databases 

But what can happen if you are not actively and continually ensuring your third parties, or their executives, are not on a sanctions list?  Inaction or delayed detection can result in: 

• Civil or criminal penalties 

• Loss of government contracts 

• Reputational harm and media exposure 

• Regulatory investigations for due diligence failures 

This isn’t theoretical. There are documented cases of companies continuing to work with blacklisted entities because the list was checked “once, at onboarding.” 

Where Automation Fits In 

Automated screening ensures you aren’t relying on point-in-time checks or someone’s memory to flag a critical compliance issue. 

Here’s how it works: 

1. Continuous Third Party Monitoring 

• Third Parties are screened continuously against real-time or nightly updated watchlists 

• If a match is found, it automatically triggers alerts and escalations 

Tool Tip: Many due diligence and TPRM platforms integrate with data providers like Dow Jones, Refinitiv, World-Check, or LexisNexis for live list monitoring. 

2. Executive & Beneficial Ownership Checks 

• Automation isn’t just about third party names. It also scans key individuals tied to the third party (owners, board members, executives) for matches 

Tool Tip: Use enhanced due diligence services or APIs that enrich third party profiles with corporate family trees and UBOs (ultimate beneficial owners). 

3. Auto-Flagging and Escalation Workflows 

• Matched entries can be routed to TPRM or compliance teams for review 

• You can configure risk scores to increase automatically or trigger an urgent reassessment if a third party is flagged 

Tool Tip: Use case management tools to document investigation steps, outcomes, and decisions for audit-readiness. 

Real-World Example: Catching a Sanctions Match Before It Went Public 

A pharmaceutical company’s TPRM team was using automated sanctions monitoring tied to their third party master file. When a supplier’s parent company was added to the OFAC list, the system flagged the match immediately, even though the supplier’s name hadn’t changed. 

“If we had waited for the quarterly vendor review, we would’ve missed it, and been in violation,” said their Director of Compliance. 

They paused all spend, conducted a rapid risk and legal review, and replaced the third party, all documented through an automated case workflow. 

What to Monitor Automatically 

Here’s what should be in your automation scope: 

Data Type	Example
Vendor Name	Acme Global Services LLC
Parent / Subsidiary Orgs	Acme Holdings Inc.
Ultimate Beneficial Owners	John Doe, 51% Stake
Key Contacts/Executives	Jane Smith, CFO
Country of Registration	Vendors in embargoed nations

How to Get Started 

You don’t need a complex setup. Start with: 

• Free tools: OFAC’s online SDN check tool or World Bank debarred list 

• Subscription databases: World-Check, Refinitiv, LexisNexis, or Sayari 

• API integration: Tie real-time alerts into your TPRM platform or workflow engine (Zapier, Workato, etc.) 

Key Takeaways 

• Sanctions and watchlist screening shouldn’t be a “once and done” task. 

• Automation helps you stay in compliance without increasing manual workload. 

• Screening third parties and their principals continuously is essential for managing modern regulatory risk. 

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 Author Bio

Heather Kadavy

Senior Membership Success Coordinator

Heather Kadavy joined the Third Party Risk Association (TPRA) in 2023 as the Senior Membership Success Coordinator. In recent year(s) Heather has been providing freelance TPRM consulting work to various organizations after retiring from a Nebraska financial institution after nearly 35 years where she oversaw and managed critical programs of the organization including Third Party Risk Management, Information Security,

Physical Security, Safety, Business Recovery, Financial Crimes, Model Risk Management, and Enterprise Risk Management.  In her TPRM role she had oversight of over a thousand third party relationships, systems, due diligence reviews and contract management activities.  She developed, facilitated, and implemented training programs for thousands of employees over the years.

Heather is a natural born connector of people and values relationship building at the cornerstone of her career.  She encourages you to connect with TPRA and herself via LinkedIn to join in the "TPRM Global Conversation".