Blocklist Check

Generally speaking, if a person or company is blacklisted, they can face:

• Sanctions (assets can be frozen, for example)
• Financial restrictions (hard to use financial services and make transactions)
• Legal consequences (such as fines or criminal charges)
• Reputational damage (especially if it’s a business and its related individuals)

A blocklist check typically runs during the user onboarding stage, before any account is accepted to the network or service is provided. However, like other AML-related tasks, it should not be a one-time event. That’s why your compliance teams need to update all internal blocklists and trigger re-screening on existing customers if any new signals/risks are detected by the AML software.

Screening and running a blocklist check helps you catch fraud right at the start, since this process is often conducted as part of the user onboarding process. It prevents blacklisted individuals and known fraudsters from accessing your services in a way that is quick (doesn’t disrupt the process for other, genuine users). Additionally, it also prevents engagement with sanctioned parties, terrorists, or criminals, helping comply with legal requirements. 

A blocklist is typically maintained by the business itself or a third-party data provider. In the meantime, a sanctions list is used on a global level, often using sources issued by a government authority or international organization (such as the EU, OFAC, or the UN), as part of AML compliance. Both are used together as part of a robust Customer Due Diligence (CDD) process. 

Ultimately, regulators expect businesses to have robust internal controls that prevent bad actors from re-entering their platforms. So, while no regulation explicitly mandates a “blocklist check”, the obligation to prevent onboarding high-risk or previously flagged individuals is part of the broader KYC/AML regulatory framework. Industries like banking, fintech, e-commerce, iGaming/gambling, real estate, insurance, etc., all use such checks to ensure security. 

A match does not automatically mean denial. Often, the company’s in-house analysts see it as the need to manually review the trigger. If it appears not to be a false positive, depending on the company’s risk appetite, analysts can decline the onboarding, or, after further review, file a SAR, or apply Enhanced Due Diligence (EDD)/enhanced monitoring, depending on the nature of the flag and overall regulatory obligations.