OpenSanctions: Fair, Affordable, and Privacy-Preserving PEP/Sanction Checking
What is OpenSanctions?
OpenSanctions is an open-source effort to harmonise the many different sanctions and PEP lists published by various government agencies. Having open-source screening is important for several reasons, such as:
Being told you are on a sanction list somewhere has far-reaching implications. Doing business or financial transactions via regular channels becomes nearly impossible. False positives happen and are a fact of life. But recourse is hard or even impossible when the data on which you are flagged is stored in a black box, inaccessible for anyone but the sanctioning entity. Having an open and transparent list makes it easier to detect false positives for both parties.
Data sources are increasingly used in everyday decision processes, and ensuring fairness should be high on anyone’s agenda.
Not everyone has deep pockets, journalists least of all. In a world that is ever more driven by data, it is important to give people the tools they need to counter fraud and corruption. The lists OpenSanction uses are expressly designed to be consumed by the public. Having a holistic view of the data contained cuts back on the work investigators need to do, allowing them to focus on the story instead.
Adding information would also be easier in an open-source environment. It is easier to contribute to Wikipedia than to Encyclopedia Britannica. Doing so in the open makes for accountable work.
More and more financial institutions are asked to perform sanction and PEP checks. This incurs costs and, therefore, hampers adequate adoption of such checks. Having a cost-effective way of doing checks is beneficial for everyone, the financial institution, the government and ultimately the security of the citizen. OpenSanctions costs less than the alternatives and has the great advantage that you can acquire the data wholesale. As an institution, you no longer need to send requests to a single company revealing your trading volume or other sensitive data.
The de facto standard in the industry is World-Check. This list has more entities but is compiled by one company, in which the bias is inherently bigger than an open-source list. OpenSanction can be more objective. It will be some time before OpenSanctions becomes the canonical list, but it is in the industry's best interest, the government, and their citizens.
OpenSanctions was a labour of love following the classic open-source model for a long time. Since 2021, the project has received financial support from the German Federal Ministry for Education and Research. Additionally, OpenSanctions recently opted for a more sustainable approach by offering commercial licensing. You can use their harmonised data in a commercial setting for a reasonable fee. As a business, you can run their software on-premise, or you can opt to have OpenSanctions do it and integrate with an API. Having these options greatly reduces the risk of adopting OpenSanctions as they can now sustainably operate.