3 reasons to utilise sanction screening services for future employees

Written by
RMI Team (D)

In today’s dynamic corporate landscape, human resources (HR) departments are tasked with ensuring the integrity and suitability of potential hires. Organisations must adopt robust screening measures to mitigate risks associated with sanction violations and adverse media exposure.

Sanction screening, in the context of employees, involves checking individuals against lists of sanctioned or restricted persons maintained by governments, international organisations, or regulatory bodies. These lists typically include such as terrorism, money laundering, or other criminal behaviour, as well as those who are subject to specific sanctions or restrictions imposed by authorities.

The purpose of sanction screening for individuals is to identify any potential risks or concerns associated with a person’s background before hiring them—and engaging in business transactions, or other activities. Here are three compelling reasons HR departments should use screening services for sanctions and adverse media exposure when hiring.

Mitigate regulatory compliance risks

In an era marked by stringent regulatory frameworks, organisations face significant penalties and reputational damage for non-compliance with sanctions regulations. By incorporating screening services into their hiring process, HR departments can effectively identify individuals with connections to sanctioned activities, safeguarding their organisation from legal liabilities.

Such legal liabilities are a growing concern globally. In 2023, the cumulative penalties for breaches in anti-money laundering (AML), know your customer (KYC), environmental, social, and governance (ESG), sanctions, and customer due diligence (CDD) regulations amounted to US $6.6 billion. This marked a significant increase compared to US $ 4.2 billion in 2022.

By using screening services, companies can streamline compliance efforts and reduce inadvertent violations caused by employees who may be potential threats to the organisation.

Protect organisational reputation

An organisation’s reputation is its most valuable asset, influencing stakeholder perceptions and market competitiveness. Hiring individuals with dubious backgrounds can tarnish the reputation built painstakingly over the years. Engaging screening services for media searches enables HR teams to conduct comprehensive due diligence, uncovering any adverse media coverage or negative publicity surrounding potential candidates.

Reputation—good or bad—can profoundly impact business performance. According to one study, businesses lose 22 per cent of their business due to negative reviews. In fact, investors tend to stay away from companies with a tarnished reputation, which affects stock valuation. By pre-screening a candidate, businesses can uphold the trust and credibility of their organisation within the industry and among stakeholders.

Enhance risk intelligence and risk management efforts

Risk management policies encompass guides and protocols businesses implement to recognise, evaluate, and alleviate risks that could impact their operations.

However, risk intelligence preempts risk management. It refers to the ability to “identify, assess, and prioritise risks in a way that empowers organisations to make informed decisions.” Risk intelligence refers to gathering data and information to identify potential risks. Sanctions screening and scanning for adverse media exposure businesses can mitigate risks related to regulatory compliance, financial crime, reputational damage, and security threats.

At RMI, we can access global datasets such as Global Fraudster, Crimes of Dishonesty, and Global Law Enforcement. These databases have detailed profiles of nefarious individuals, and we can conduct searches against 20,000 global online and print media agencies to protect your company.

Contact us today to learn how our candidate screening services can save your business from a risky hire.