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      How Sanctions Checks Work for Exempt Market Dealers Using addy

      Every month, addy automatically screens all investor accounts against the UN Security Council's consolidated sanctions list.

      Overview

      If you’re an exempt market dealer (EMD) using addy’s platform to manage investments, we’ve built a fully automated system to help you stay compliant with your obligations under suppression of terrorism and Canadian sanctions laws.

      Each month, the addy system runs a mandatory sanctions screening check across your entire book of investor records.

      🔁 How it Works

      1. Automatic List Import

        • On the 1st of every month, addy automatically fetches the most up-to-date version of the United Nations Security Council Consolidated List.

        • This list is published in XML format and includes individuals and entities subject to UN sanctions:
          🔗 UN Consolidated List

      2. Investor Name Matching

        • Every InvestorProfile in your dealer account is scanned.

        • The system constructs full legal names using:

          • legal_name

          • legal_last_name

          • As well as up to four name components from sanctioned entities (e.g., <FIRST_NAME>, <SECOND_NAME>, <THIRD_NAME>, <FOURTH_NAME>).

        • Fuzzy matching logic checks for name similarities above 95% confidence using string comparison techniques (e.g., Levenshtein distance).

      3. EMD Alerting & Review

        • If a potential match is found (≥95% match score), addy will email your compliance contact with:

          • The name(s) flagged

          • Match score

          • A CSV of relevant investor details for review

        • If no matches are found, we’ll still send a confirmation email — so you always have proof the check was completed that month.

      4. You Investigate

        • Your team must follow up internally or via FINTRAC procedures as appropriate.

      ⚠️ What You Need to Know

      • This happens monthly, automatically. No action is required to trigger the check.

      • addy does not verify or confirm sanctions matches. The system highlights potential risks, but the responsibility to assess and take action stays with you.

      • We’ll email you every time the check is run. Whether there’s a match or not, you’ll receive a monthly confirmation — creating a clear record for compliance audits.

      • Privacy-first design. addy never shares flagged names externally and does not notify the investor.

      🧠 FAQs

      Q: What happens if someone matches but it’s a false positive?
      You’ll have the chance to review the full investor file. Often, similar names can trigger the flag — you can clear the record manually in your logs.

      Q: Can I override the threshold?
      Not yet. The threshold is fixed at 95% to reduce false positives. Let us know if you’d like to customize this in the future.

      Q: Does this satisfy all my obligations under Canadian sanctions laws?
      Not entirely. This is one part of a broader compliance program. You’re still responsible for identity verification, source of funds review, recordkeeping, and other duties under Canadian law.

      Q: Can I get a copy of the match report for my audit file?
      Yes. All notifications include a downloadable CSV summary you can store in your compliance folder.

      ✅ Good to Know

      This feature is live for all exempt market dealers using addy. If you want to test how it works or simulate a match scenario for training, reach out to our support team or your dealer onboarding specialist.

      Let us know if you'd like to extend this feature to include additional watchlists (e.g., OSFI, Canadian autonomous sanctions). We're always happy to build with you.