Why sanctions screening returns false positives

Screening practice · 5 minute read

Screening is string matching, and string matching is blunt. A short abbreviation turns up inside an unrelated longer word, a common industry token is shared by thousands of companies, and a name written in another script loses letters on the way to Latin. Most hits are not the company in front of you.

The five ways a false positive is born

  1. Substring hits. A three- or four-letter abbreviation matches inside an unrelated word. Screening that matches substrings instead of whole words produces hits with no relationship to the searched party at all.
  2. Generic tokens. Trading, Group, Express, Logistics, International, Holding. These appear in tens of thousands of registrations worldwide.
  3. Transliteration. Converting Chinese, Cyrillic, Arabic or Greek names into Latin letters is not one-to-one. The same legal name can produce several plausible spellings, and list entries carry whichever version the issuer used.
  4. Legal-form and punctuation noise. Ltd, Ltd., Limited, LLC, GmbH, A/S, and the difference between a comma, a full stop and a space. None of it identifies anybody.
  5. Recycled names. A dissolved company's name is reused by a new registration in the same city. Screening catches the name, which is now attached to a different legal person.

How to clear a hit properly

CompareReal hitFalse positive
Country of registrationMatches the entryDifferent country, or the entry has none recorded
AddressSame city and street as recordedAn address that does not exist in the entry
Registration numberPresent in the entry and consistentBelongs to a different entity, past or present
Business activityConsistent with the stated reason for listingDifferent sector entirely
Script of the listed nameSame name in the same scriptThe match only appears after transliteration

If two or more of those disagree, you are looking at different companies. Write down which ones disagreed and the date you checked — the note is the thing that protects you six months later, not the memory of the decision.

Reducing the noise without hiding real hits

Word-boundary matching instead of substring matching removes the largest class of junk, and normalising accents and other scripts removes a second class. Both come with a cost: loose matching hides nothing and drowns you, tight matching is quiet and risks missing a real variant. The honest position is that no single configuration is right for every counterparty, which is why the result is read by a person.

Frequently asked

Should I stop trading with a company that shows a hit?

Not on the strength of the hit alone. Clear it against identifiers first. Only a confirmed match is a confirmed match.

How often should I re-screen?

Before onboarding, before each payment run in high-risk corridors, and whenever the counterparty's details change. Lists change continuously, so a check carries the date it was made.

What this page does not do. It does not tell you the result for a specific company, and it is not legal advice. Our free check shows you the entries that come back for a name; clearing a hit against identifiers is still a human step.

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