Sanctions and PEP screening of job candidates
UK financial sanctions apply to every person and business in the UK. Where someone is subject to an asset freeze, it is generally prohibited to make funds or economic resources available, directly or indirectly, to them or for their benefit, unless an exception applies or the Office of Financial Sanctions Implementation (OFSI) has issued a licence. A breach may lead to criminal prosecution or a monetary penalty. Since 28 January 2026 the UK Sanctions List, published by the Foreign, Commonwealth and Development Office (FCDO), has been the only list of UK sanctions designations.
No law requires an ordinary employer to screen staff against that list, so the Information Commission (ICO) vetting test decides whether you should: a legal obligation or a significant and particular risk, and no less intrusive alternative. A check of the person you intend to appoint is narrow, but name matches are common and most are not the listed person. The politically exposed person (PEP) rules in the Money Laundering Regulations 2017 concern a regulated firm's customers, not its staff. PEP status is not in itself a reason to refuse someone a job.
What sanctions law means for an employer
OFSI's general guidance says UK financial sanctions apply to everyone within the UK's territory and to all UK nationals and UK legal entities, wherever they operate. That covers employers in England, Wales, Scotland and Northern Ireland alike. Under an asset freeze it is generally prohibited to deal with a designated person's funds or economic resources, to make funds or economic resources available to them or for their benefit, or to circumvent those prohibitions.
Funds generally means financial assets and benefits of every kind, including cash and balances on accounts. If you know or have reasonable cause to suspect that you are dealing with a designated person's funds or economic resources, OFSI says you must freeze them, not make them available unless an exception or licence applies, and report them to OFSI. Reasonable cause to suspect is an objective test.
Paying a designated person
OFSI's general guidance does not deal directly with an employer paying a designated employee, although it lists remuneration of employees among the basic needs of a designated entity for which a licence can be sought. Its published FAQs do contemplate designated employees: the exception for required payments to HMRC covers, for example, an employer that is not itself designated paying PAYE income tax for a non-UN designated employee, and anyone making such a payment must report it to OFSI. Licences cannot be issued retrospectively.
Our view: paying wages, expenses or benefits to a designated person without a licence is very likely to be making funds available. If you find that a candidate or employee may be a designated person, pause payments, take legal advice and contact OFSI promptly.
The UK Sanctions List since 28 January 2026
From 9am on 28 January 2026 the UK Sanctions List became the only sanctions list detailing designations published by the UK government. OFSI's Consolidated List of Asset Freeze Targets and its search tool are no longer updated, so any process or supplier still using them needs to move across. The UK Sanctions List covers people, entities and ships designated or specified under regulations made under the Sanctions and Anti-Money Laundering Act 2018, and the restrictions can include financial, immigration, trade or transport sanctions.
The list changes often, and FCDO aims to add new UN and UK listings within one working day, so a check at offer stage tells you about that day only. The GOV.UK search tool offers fuzzy logic search, ranked results and highlighted matches. A sanctions-related director disqualification also appears on the Companies House register, which our directorship checks page covers.
When screening a candidate is proportionate
The ICO's draft guidance on pre-employment vetting, under review following the Data (Use and Access) Act 2025, says you should only vet where you have a legal obligation or can identify significant and particular risks, and that the check must be proportionate and targeted, with no less intrusive alternative. Our view: sanctions law prohibits making funds available but does not require you to screen staff, so record your reasoning.
Our view: one check of the person you intend to appoint, against one public government list, is a light step for roles where your risk assessment shows a real exposure. Screening every applicant at the start of a process is harder to justify. Decide who to screen by role, never by nationality or by how a name sounds. In Great Britain, race under the Equality Act 2010 includes colour, nationality and ethnic or national origins.
Name matches and false positives
OFSI distinguishes a name match, where a name matches a list entry, from a target match, where the person matches all the information on the list. A name match does not necessarily mean you are dealing with the listed person. An entry for an individual can include name variations, date of birth, place of birth, nationality, passport and national ID details, addresses and position. Compare those with details the candidate has already given you, such as their right to work documents.
OFSI's own examples help. A teenager born in the UK who shares a name with a listed general is a name match. A close name match with a similar date of birth but a different address is a potential target match, and OFSI says to contact it immediately. If you are satisfied the person is not the one listed, you do not need to take further action. If you are still unsure, you can contact OFSI. Keep your reasoning on file, and keep an unresolved match away from the hiring decision.
What the PEP rules cover
Regulation 35 of the Money Laundering Regulations 2017 requires a relevant person to have risk-management systems to determine whether a customer, or the beneficial owner of a customer, is a politically exposed person, or a family member or known close associate of one, and to manage the enhanced risks of that business relationship. The FCA's finalised guidance FG25/3, which updated its 2017 guidance in July 2025, is about how financial services firms should treat customers who are PEPs, their family members and known close associates. Neither regulation 35 nor FG25/3 sets any rule about the people a firm employs.
So PEP status is not in itself a reason to refuse someone a job. If a role carries a genuine conflict of interest or bribery risk you have documented, ask the candidate to declare relevant public roles and connections. Take care with what you record: the ICO lists personal data revealing political opinions as special category data, which needs a separate condition to process.
Lawful basis and criminal offence data
The ICO says you cannot rely on the legal obligation basis if you have discretion over whether to process the data, or if there is another reasonable way to comply. Because no law requires employee screening, many employers will look to legitimate interests instead, which needs the three-part test, a record of your assessment and a mention in your privacy information.
The ICO says criminal offence data includes suspicion or allegations of criminal activity, not just convictions. Our view: some designations concern conduct that could be criminal, so treat a record of a possible match with the same care. Check whether you need a Schedule 1 condition under the Data Protection Act 2018, such as preventing or detecting unlawful acts, and an appropriate policy document. If you want a second view on whether screening fits your roles, ask HRjoy.
What to tell the candidate
- That you will check their name against the UK Sanctions List, at what stage and why the role needs it.
- That a name match is not a finding, and that you may ask for identifying details to resolve it.
- Who will see the result and how long you will keep it.
- That they can explain or correct anything before you decide.
- That they can ask for a copy of their personal information; the ICO says organisations usually have one month to respond.
Sources
- UK financial sanctions general guidance · GOV.UK (OFSI)
- UK financial sanctions FAQs · GOV.UK (OFSI)
- Moving to a single list for UK sanctions designations, 28 January 2026 · GOV.UK
- The UK Sanctions List · GOV.UK (FCDO)
- The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, regulation 35 · legislation.gov.uk
- FG25/3: Treatment of politically exposed persons · FCA
- Pre-employment vetting of candidates · ICO
- Legal obligation · ICO
- Legitimate interests · ICO
- What is criminal offence data? · ICO
- What are the conditions for processing? · ICO
- What is special category data? · ICO
- Equality Act 2010, section 9 · legislation.gov.uk
- Search for disqualified company directors · GOV.UK
- Getting copies of your information (SAR) · ICO
General information for employers in the UK, not legal advice. HRjoy advises on screening policy and fair process. We do not run checks ourselves; where you need checks run, we can introduce you to our screening partners. Check the official sources for your situation.
When it’s justified
Usually justified
- We have found no law that requires an employer to screen staff against the UK Sanctions List. Where your risk assessment records a real sanctions exposure, such as a senior appointment or a role with authority over payments, a single list check on the successful candidate is usually proportionate.
- Businesses that already screen customers or counterparties against the UK Sanctions List, which can add the person they intend to appoint to the same control and record why.
Only if the role justifies it
- Re-screening existing staff, because the list changes often, where the original risk still applies.
- A declaration of public roles and connections, in place of a PEP database search, where a role carries a documented conflict of interest or bribery risk.
Rarely or never justified
- Refusing a candidate because they are, or are connected to, a politically exposed person, without a role-specific reason.
- Screening only candidates of particular nationalities or with particular kinds of name, which risks race discrimination.
- Treating an unresolved name match as a finding.
Questions
Something else? Ask us.
Do employers have to screen staff against the sanctions list?
No law requires an ordinary employer to screen employees. But UK financial sanctions apply to everyone in the UK, and making funds available to a designated person without an exception or licence may be a criminal offence. Whether to screen, and whom, is a risk decision to record using the ICO's vetting test.
Which sanctions list should we use?
The UK Sanctions List, published by the Foreign, Commonwealth and Development Office. Since 28 January 2026 it has been the only list detailing UK sanctions designations. OFSI's Consolidated List is no longer updated, so check that any software or supplier you use has moved across.
What should we do with a possible match?
Compare the identifiers on the list, such as date of birth, nationality and address, with what the candidate has given you. OFSI says a name match does not necessarily mean it is the same person, and if you are satisfied it is not, no further action is needed. If you are still unsure, OFSI says you can contact it for help.
Should we screen candidates for PEP status?
Not as a matter of course. The PEP rules in the Money Laundering Regulations 2017 apply to a regulated firm's customers and their beneficial owners, not to its employees. PEP status alone is not a reason to refuse employment. If a role carries a documented conflict of interest risk, a declaration of interests is a lighter way to address it.
Related checks
- Right to work checks: who to check and how from October 2026 Who needs a right to work check from 1 October 2026, including workers and sub-contractors, how each of the three methods works and follow-ups.
- Adverse media checks on job candidates When a UK employer can search the press and online sources for negative coverage of a candidate, and how to handle namesakes and allegations.
- Directorship and company checks on job candidates How to check a candidate's directorships and any disqualification on the Companies House register, what it verifies, and when the check is proportionate.
- Financial background checks: bankruptcy, insolvency and judgments Which financial checks a role justifies, and how to use UK insolvency registers and the Register of Judgments, Orders and Fines instead of a credit report.
- Criminal record checks for employers Which criminal record check a role can lawfully have in England, Wales, Scotland and Northern Ireland, and how to run it fairly.
Sector guides
Related answers
- What are the protected characteristics under the Equality Act 2010? The Equality Act 2010 lists nine protected characteristics: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation. In Great Britain, employers must not discriminate against job applicants, workers or former workers because of any of them.
- How do employers carry out right to work checks? Before someone starts work, employers should carry out one of three prescribed checks: a manual check of original documents, a Home Office online check using a share code, or a check through a registered right to work digital verification service provider. Done correctly, it gives a statutory excuse against a civil penalty of up to £60,000 per illegal worker.
- How should employers handle an employee subject access request? Employers should recognise the request, which can be made verbally or in writing, confirm the person's identity if needed, make a reasonable and proportionate search and respond without undue delay and within one month. Complex requests can be extended by up to two months. A fee usually cannot be charged, and information about other people may need redacting.