Solutions | AML Sanctions Screening

AML Guide for the SaaS Industry

The Software-as-a-Service (SaaS) industry, with its widespread adoption of cloud-based services and digital platforms, faces unique challenges in preventing money laundering. This guide outlines the key measures SaaS companies must adopt to comply with Anti-Money Laundering (AML) regulations and protect their platforms from misuse.

Money Laundering and SaaS Companies

SaaS companies, particularly those providing payment processing, virtual platforms, or digital solutions for financial transactions, are vulnerable to exploitation by money launderers. Common tactics used by criminals in the SaaS industry include:

Using SaaS platforms to obscure the source of illicit funds through digital payments or virtual currencies;

Setting up fake accounts or companies to funnel illegal money through subscription services; and

Leveraging automated features and multi-layered transactions to hide the origin and destination of funds.

Examples of potential money laundering avenues in SaaS include:

Payment Gateways

Money launderers may use SaaS companies that provide payment gateways to process large sums of money, hiding illicit funds within legitimate payment streams.

Virtual Currencies

Platforms that support digital currencies or tokens are particularly attractive to criminals, offering an additional layer of anonymity in transactions.

Subscription-Based Services

Criminals may sign up for subscription services using fraudulent accounts, then overpay or underpay intentionally to move money without detection.

AML Regulations in the SaaS Industry

To prevent money laundering, SaaS companies are subject to several AML regulations, especially if they provide services related to payments, financial transactions, or digital assets.

Know Your Customer (KYC) Requirements

KYC compliance is essential for SaaS platforms that handle user data, financial transactions, or subscriptions. Companies must:

Verify the identity of users during the account registration process;
Collect relevant data such as name, address, and payment information to confirm the legitimacy of the user or business entity;
Identify the ultimate beneficiaries or owners behind any accounts or transactions.

KYC procedures should be integrated into the onboarding process and continuously reviewed to detect any changes in user behaviour or risk profile.

Sanctions Screenings

SaaS platforms must implement sanctions screening to ensure that they are not providing services to prohibited individuals, entities, or countries. Key components of sanctions screening include:

Checking user information against global sanctions lists before allowing access to services;
Blocking transactions or suspending accounts if a user is flagged as sanctioned;
Reporting any suspicious activity or attempts to bypass sanctions to the appropriate authorities.

Screening must be ongoing, especially for subscription services and platforms that handle financial transactions. SaaS companies must ensure they regularly update their sanctions lists and screening processes.

Transaction Monitoring

Transaction monitoring is crucial for SaaS companies that process payments or enable financial transactions through their platforms. SaaS firms must:

Monitor payment activities, especially those involving large sums, high frequencies, or unusual patterns;
Use machine learning and data analytics tools to flag suspicious transactions and behaviour that deviates from normal user patterns;
File suspicious activity reports (SARs) with relevant financial authorities if any money laundering indicators are detected.

Red flags in the SaaS industry include:

Frequent and unexplained refunds or chargebacks;
Multiple accounts associated with the same user or payment method;
Unusual transactions involving cryptocurrency or other high-anonymity payment methods.

Adequate Supervision

For SaaS companies to ensure compliance with AML regulations, they must have strong internal supervision and oversight. This includes:

Appointing an AML compliance officer who understands the unique risks of the SaaS industry.
Ensuring that the board of directors or senior leadership is responsible for overseeing the company’s AML program.
Regularly reviewing and updating AML policies and training employees on how to detect suspicious behaviour or transactions.

Adequate supervision requires frequent audits, risk assessments, and proactive adaptations to emerging trends in money laundering activities. SaaS companies must also invest in the latest technology to strengthen their AML frameworks.

By following these AML guidelines, SaaS companies can effectively protect their platforms from being exploited for money laundering while remaining compliant with global regulations.

Sanctions lists

Our Sanctions Database covers Sanctions Lists from OFAC, Canada, HM Treasury, EU, Australia and many more regions and organisations globally.

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PEP data

Our Politically Exposed Persons (PEP) database covers about 1million records from every country worldwide. Lists also include family members and close associates of PEPs.

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Crime Watchlists

Our Crime Database includes more than 8k records from Interpol and the FBI. More Watchlists are being added continuously

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For a detailed guide on how AML Sanctions Screening applies to your industry, click the relevant icon below.

Financial Institutions

Professional Services

Global Sanctions Lists

The sanctions lists below are included in every sanctions data subscription. Additional sanctions lists can be included on request, please contact support for more information.

United States

Office of Foreign Asset Control (OFAC)

Specially Designated Nationals (SDN), Consolidated Sanctions List (Non-SDN) and various additional sanctions lists (MBS, CCMC, CMIC, CAPTA, FSE, PLC, SSI)

Canada

Global Affairs Canada

Consolidated Canadian Autonomous Sanctions List incl. Special Economic Measures Act (SEMA) and the Justice for Victims of Corrupt Foreign Officials Act.

United States

Department of State (DoS)

ITAR Debarred (ITAR), Nonproliferation Sanctions (ISN), Cuba Restricted List

United States

Bureau of Industry and Security (BIS)

Entity List (EL), Denied Persons List (DPL), Military End User List (MEU), Unverified List (UVL)

United States

Financial Crimes Enforcement Network (FinCEN)

311 Special Measures

United States

Department of Homeland Security (DHS)

Uyghur Forced Labor Prevention Act Entity List (UFLPA)

United States

U.S. Customs and Border Protection

Withhold Release Orders

Argentina

Ministry of Justice

Public Registry of Persons and Entities Linked to Acts of Terrorism and Financing (RePET)

Brazil

Brazil Central Bank

Brazil

Brazil Federal Government

Empresas Inidôneas e Suspensas (Disreputable and Suspended Companies)

Brazil

Brazil Tribunal de Contas da União (TCU)

List of individuals disqualified from public service and debarred bidders

European Union

European Bank for Reconstruction and Development

List of Ineligible entities

European Union

Consolidated list of persons, groups and entities subject to EU financial sanctions (CFSP)

United Kingdom

Office of Financial Sanctions Implementation (OFSI)

Financial Sanctions by The Office of Financial Sanctions Implementation (OFSI), part of Her Majesty's Treasury (HMT)

Israel

National Bureau for Counter Terror Financing

Terrorist List National Bureau for Counter Terror Financing of Israel

Belgium

Federal Public Service Finance

National Financial Sanctions

Netherlands

Government of the Netherlands

National Sanctions List Terrorism

France

Ministry of Economy, Finance, and Recovery

List of Asset Freezes (GEL)

Switzerland

State Secretariat for Economic Affairs (SECO)

Consolidated Swiss Sanctions List

Poland

Ministry of Internal Affairs and Administration

List of persons and entities subject to sanctions

United Arab Emirates

Supreme Council for National Security

National Sanctions List with names of individuals and entities identified as

India

Ministry of Home Affairs

Terrorist Organizations and Unlawful Associations List

Singapore

Monetary Authority of Singapore

MAS Enforcement Actions

Singapore

Attorney-General's Chambers of Singapore

Terrorism (Suppression of Financing) Act 2002

Malasya

Ministry of Home Affairs

Ministry of Home Affairs List (Act 613, Section 66B)

Japan

Ministry of Finance

Economic sanctions and target list

South Africa

Financial Intelligence Centre (FIC)

Targeted Sanctions List

South Africa

Financial Sector Conduct Authority

Targeted Sanctions List

South Africa

National Treasury Department

Restricted Supplier and Tender Defaulter Report

Morocco

Commission Nationale chargée de l'application des sanctions (CNASNU)

Local Terrorist List with names of individuals and entities identified as terrorists by CNASNU (Commission Nationale chargée de l'application des sanctions)

Nigeria

Nigeria Sanctions Comitee

Nigeria Sanctions Commitee's sanctions list

* Additional sanctions lists can be added on demand. Just reach out to our Customer Success Team.

Politically Exposed Persons

What are Politically Exposed Persons (PEPs)?

Domestic Politically Exposed Person (DPEP)

These are individuals who hold prominent public positions within their own country.

This includes:

Heads of state or government
Senior politicians, government ministers, and judiciary officials
Senior executives of state-owned corporations
High-ranking military officials.They are classified as DPEPs due to their potential access to public resources, which could make them vulnerable to corruption or abuse of power.

Foreign Politically Exposed Person (FPEP)

These are individuals who hold, or have held, similar high-level roles in foreign countries. FPEPs are foreign officials or their associates who might also be in a position to abuse their influence for personal or financial gain.

Examples include:

Foreign heads of state or government officials
Senior politicians or diplomats from foreign governments
Foreign judges or military leaders

Domestic Politically Influenceable Person (DPIP) - Family Members

These are close relatives of Domestic PEPs (DPEPs).

Family members can include:

Spouses or partners
Children and their spouses or partners
Parents, siblings, or other close relatives. Due to their relationship with a politically exposed person, they may have access to privileged information or influence, which makes them susceptible to exploitation or corruption.
Close associates are individuals who are closely connected to a PEP, either socially or professionally.

Foreign Politically Influenceable Person (FPIP) - Close Associates

These are individuals who maintain close business or personal relationships with Foreign PEPs (FPEPs).

A close associate could be:

Business partners
Close friends or advisers
Legal representatives or those with significant control over a PEP’s assets FPIPs are often involved in business dealings or transactions that may raise concerns about conflicts of interest or the misuse of political connections.
Close associates are individuals who are closely connected to a PEP, either socially or professionally.

Each of these classifications is used in anti-money laundering (AML) and know-your-customer (KYC) processes to identify and mitigate risks associated with potential corruption or financial crimes. Identifying these individuals helps institutions flag potentially suspicious activities that may be linked to political influence.

Smart screening technology for effective AML compliance

Less False Positives and False Negatives

Name matching is the real challenge in Sanctions & AML compliance. Transliteration issues, nicknames, honorifics, and spelling errors are some of the factors that make name screening a challenge. This cannot be solved with simple fuzzy algorithms.

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Name matching explained

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Easily integrated into your own system environment

Integrate Business Partner Screening with your own system environment by simply using our REST API, our Sanctions Database Exporter option, or our pre-built integrations for SAP, BigID and API3 Airnode.

Sanctions & AML API

Developer friendly, easy to implement and Enterprise-ready RESTful API with a guaranteed uptime of more than 99.99% and > ~200ms response time.

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Through batch verification, businesses can efficiently manage and update large volumes of data, ensuring compliance with ease.

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Integrations

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Crime Watchlists

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FBI and Interpol Data

Gain access to our comprehensive global Criminal Watchlists database covering more than 8k records.

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Mitigate sanctions risk with hourly data updates. Audit relevant timestamps for increased transparency.

Smart Matching Technology

Maximise the benefits of our screening technology: Significantly reduce false negatives and false positives, and boost accuracy.

FBI and Interpol Watchlists

FBI's Most Wanted & Fugitives

The FBI's Most Wanted list is maintained by the FBI and publicly available on their website. Removal from the list typically occurs only upon capture, death, or dropped charges.

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Why AML compliance is important

For businesses to actively prevent financial loss and reputational damage, it's crucial that comprehensive due diligence processes are carried out.

Datanamix’s due diligence product suite includes AML (anti-money laundering) sanctions screening, PEP (PIP) data, Adverse Media and Crime data – all customisable depending on your specific industry, and unique business needs.

Datanamix offers a suite of AML Sanction Screening products to enable the right level of risk mitigation for every class of business – from accountable institutions bound by the FIC Act, to SMEs simply looking to protect their interests.

Datanamix due diligence product suite includes AML (anti-money laundering) Sanctions Screening, PEP (PIP) data, Adverse Media and Crime Data – all customisable depending on your specific industry, and unique business needs.

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Adverse Media

Adverse Media Screening is the process of monitoring public sources, like news and social media, to detect negative information about individuals or organisations. It helps businesses identify risks such as criminal activity, fraud, or regulatory violations, which could harm their reputation or legal standing. Used for risk assessment and compliance (e.g., anti-money laundering or Know Your Customer regulations), adverse media screening is often automated to handle large volumes of data and provide real-time alerts. It's a key part of due diligence and risk management strategies.