Payment screening

The Wolfsberg Guidance on Sanctions Screening (2019) separates two controls. Customer screening checks the parties a bank does business with, at onboarding and then at set intervals. Transaction screening checks the movement of value between parties, typically in real time, at a point where the payment can still be stopped. Wolfsberg describes real-time screening of cross-border payments as common practice.

In a payment message the screened data is the names of remitter and beneficiary, agents, intermediaries and banks, BICs and other routing codes, the free-text purpose field and the addresses and countries. Amounts, dates and reference numbers are of no use for screening, according to the guidance.

Screening software compares names with fuzzy matching, so that a transliterated or misspelled name still produces a hit. The Wolfsberg guidance notes the price: fuzzy matching, alias handling and poor data produce many false positives, and an alert is a starting point for review that proves nothing by itself. Short names, nicknames and common acronyms on the lists are weak aliases that cause many false hits. Date of birth, nationality and place of birth let an analyst separate a true match from a false one.

Banks tune the system before it goes live and afterward: which lists apply, which low-risk parties are excluded, which recurring false positives are suppressed and how strict the match threshold is. Wolfsberg asks for documented decisions, independent testing and alert metrics, and warns that large list changes cause alert spikes. In Germany, frozen funds are reported to the Bundesbank, as the page on sanctions compliance in Germany explains.

An instant credit transfer has to reach the payee within ten seconds, at any hour, as the instant payments in Europe page explains. For these transfers the Instant Payments Regulation changed the screening method. Under the new Article 5d of the SEPA Regulation, a provider that offers instant credit transfers checks whether any of its own customers are subject to targeted financial restrictive measures, immediately after a new measure enters into force and at least once every calendar day.

During the instant transfer itself, neither the payer's nor the payee's provider may check whether payer or payee are subject to those measures. Other restrictive measures and anti-money laundering duties stay unchanged. The rule has applied since 9 January 2025. Before the transfer, the bank also runs the verification of payee check on the name and IBAN.

Payment screening compares one payment with sanctions lists before it is executed and stops it on a confirmed hit. Transaction monitoring looks at the flows on an account over time to find patterns of money laundering, as the transaction monitoring page explains.

No. Wolfsberg notes that domestic payments may not need real-time screening where the same sanctions and know-your-customer rules apply to both sides. For instant credit transfers in euro, EU law bans the per-payment check for targeted financial restrictive measures and requires the daily customer check instead.