Sanctions, PEP and adverse-media checks require different responses.
Sanctions, PEP and adverse media screening run on the same names and answer different questions. Knowing which is which decides what a match means for your file.
By Matthew Lee
Three screens. The same names. Three different questions.
A sanctions check asks whether the law forbids dealing with this person. A PEP check asks whether their public role calls for more scrutiny. An adverse media check asks what is known about them that should change your view of the risk.
Sanctions: a legal prohibition
In Hong Kong, United Nations Security Council sanctions take effect through regulations made under the United Nations Sanctions Ordinance (Cap. 537). The Commerce and Economic Development Bureau publishes the persons and entities subject to targeted financial sanctions under each regulation, alongside the UN consolidated list.
Except under a licence, it is an offence to make funds or economic resources available to a designated person, to someone acting for them, or to an entity they own or control. A frozen asset is reported to the JFIU by suspicious transaction report.
The HKMA's AML/CFT guideline asks banks to screen every customer and beneficial owner at onboarding and against every new designation, whatever the customer's risk rating (paragraph 6.16).
The guideline says banks normally have no duty under Hong Kong law to follow other jurisdictions' unilateral sanctions, but a bank operating internationally must understand the regimes that affect it (paragraph 6.11). For many firms that means the OFAC Specially Designated Nationals list, the UK Sanctions List, the only source of UK designations since the OFSI consolidated list closed on 28 January 2026, and the EU consolidated list.
Ownership counts here too. Under OFAC's 50 Percent Rule, an entity owned 50% or more in aggregate by blocked persons is itself blocked, even when it is not named.
PEPs: a risk classification
A politically exposed person is not barred from banking. The status tells you to look harder at where their money came from.
Schedule 2 of the AMLO defines a politically exposed person as an individual entrusted with a prominent public function in a place outside Hong Kong: a head of state or government, senior politician, senior government, judicial or military official, senior executive of a state-owned corporation or important party official. Spouses, partners, children, parents and close associates are included.
For these PEPs, section 10 requires senior management approval and reasonable measures to establish the source of wealth and the source of funds.
Two changes took effect on 1 June 2023 with the 2022 amendment ordinance. The definition now runs from outside Hong Kong, where it used to run from outside the People's Republic of China, so Mainland officials fall within it. And a former non-Hong Kong PEP who no longer presents a high risk, on an appropriate risk assessment, no longer needs those measures (Schedule 2, sections 5(5) and 10(3)).
The HKMA guideline says that decision follows risk, not a fixed time since leaving office (paragraph 4.9.13). It names the factors: the influence the person can still exercise, the seniority of the old role, and any link between the old and new roles.
Hong Kong PEPs and international organisation PEPs are defined in the guideline. The same enhanced measures apply to them when the relationship is high risk (paragraph 4.9.18).
Adverse media: a judgement
Adverse media has no statutory definition. It is unstructured: press reports, court records and regulatory notices, in any language. The HKMA lists information from public databases and the internet among enhanced due diligence measures (paragraph 4.9.6) and expects adverse news screening before a private banking relationship (paragraph 12.6).
Check relevance: a name may belong to someone else, and a dispute is not a conviction. Record the source and your conclusion.
Side by side
| Sanctions | PEP | Adverse media | |
|---|---|---|---|
| Question | Is dealing prohibited? | Does the role raise the risk? | What is known that changes the risk? |
| Basis in Hong Kong | Regulations under Cap. 537; other regimes by exposure | AMLO Schedule 2, section 10; HKMA guideline 4.9 | Risk assessment; HKMA guideline 4.9.6 and 12.6 |
| Source | Official lists | Public information and commercial databases | News, courts and regulators |
| A confirmed match means | Apply the relevant regime: restrictions, freezing and reporting where required; check licences or permissions | Apply the required enhanced measures for the PEP category and risk | Assess reliability and relevance; consider enhanced due diligence or other duties |
Screen the right names
Every one of these checks runs on names. Screening the company alone misses the director who signs and the shareholder two layers up, and paragraph 6.16 covers beneficial owners as well as the customer. The PEP definition reaches close associates, including a person who shares a beneficial interest in a company with the PEP.
So the registry comes first: directors from the company particulars, members from the annual return, and owners traced through each layer as our UBO tracing guide describes. Mainland names need the Chinese characters as well as the romanisation.
How Fill Easy fits in
CorpVerify returns the names to screen: directors, shareholders and traced owners, in English with the original documents attached. Our API screens a person against AML, sanctions and PEP lists in the same call and returns each match with a PDF for the file.
We do not search the press. Adverse media in that sense is a screening provider's job. What we add is adverse information from public records: the Hong Kong litigation search, and Mainland court, enforcement and adverse records through China Cross-Border Data.
Which of your three screens runs on the full list of owners today?