Client matches the DFAT Consolidated List? What to do

A sanctions screening result that points to the Department of Foreign Affairs and Trade (DFAT) Consolidated List needs a different response from almost any other screening outcome. A PEP match tells you to look more closely. A confirmed sanctions match can mean you are legally prohibited from dealing with that person, their money or their property.

This guide is for Australian businesses, including small firms newly covered by AML/CTF rules. It explains what the Consolidated List is, how to tell a possible match from a real one, and the steps DFAT expects you to take if the match is real. It is general information. DFAT itself advises seeking legal advice when you find a match, and that advice applies here.

Australian sanctions laws apply to every business

Sanctions obligations are separate from AML/CTF obligations. You do not need to be enrolled with AUSTRAC for them to apply. Australian sanctions laws cover activities in Australia and activities overseas by Australian citizens and Australian bodies corporate.

The Consolidated List is DFAT’s list of people and entities designated under Australian sanctions laws. It brings together designations under United Nations Security Council sanctions and Australia’s autonomous sanctions. DFAT describes checking the list before dealing with a person, entity or vessel as a precaution that helps you avoid contravening sanctions laws.

For listed people and entities, targeted financial sanctions generally prohibit:

using or dealing with assets they own or control, which is what an asset freeze means
making assets available to them or for their benefit, directly or indirectly

“Asset” is broad. It includes money, property, shares and other tangible or intangible items, so client funds in a trust account or a property you are helping to sell can be caught.

First, confirm whether it is a real match

Most screening hits are not real matches. Before you act on a sanctions result, compare the identifiers in the list record with what you know about the client: full name and aliases, date of birth, place of birth, nationality and, for entities, registration details and address. Our guide to reviewing a potential match sets out how to weigh each one.

There are three possible conclusions:

Conclusion	What to do
Clearly a different person or entity	Record which identifiers ruled it out, then continue
Cannot rule it out	Do not proceed. Collect more identifiers and seek advice before any dealings
Same person or entity	Follow the steps below

Treat ‘cannot rule it out’ with the same caution as a confirmed match until it is resolved. Sanctions offences carry criminal penalties, so a doubtful match should not be closed on assumption.

Steps to take if the match is real or likely

1. Stop and do not deal with the client’s assets

Do not start or continue the service, and do not move, release or use money or property connected with the client. Under Australian sanctions laws you must not use or deal with an asset owned or controlled by a designated person or entity, or allow or facilitate anyone else to do so, unless you hold a sanctions permit.

2. Freeze any asset you hold

If you hold, or think you may hold, an asset that is owned or controlled by a designated person or entity, DFAT says you must hold, or freeze, it. In a small firm this could be client money in a trust account, a deposit, or documents of title held for a transaction.

Freezing means putting controls in place so that nobody can use or deal with the asset. Note it clearly on the client file and tell anyone in your firm who could otherwise process a payment.

3. Notify the Australian Sanctions Office and the AFP

DFAT’s guidance is to inform the Australian Sanctions Office (ASO) by emailing asset.freezing@dfat.gov.au and to notify the Australian Federal Police (AFP) through its Report a crime form, as soon as possible. Asset holders are required by law to give the AFP specific information about controlled assets.

If you have identified an attempted dealing that has not happened, DFAT also asks for it to be reported to the ASO at sanctions@dfat.gov.au.

4. Get legal advice before any further dealings

DFAT’s own guidance is to seek legal advice before proceeding with any dealings involving a matched person or entity or their assets. Some activities may be possible under a sanctions permit, which is applied for through Pax, DFAT’s sanctions portal. A permit has to be granted before the activity, not after.

5. Consider your AML/CTF reporting obligations

If you are an AUSTRAC reporting entity, a sanctions match may also give you reasonable grounds for suspicion that require a suspicious matter report (SMR). The SMR deadline is 24 hours where the suspicion relates to terrorism financing and 3 business days in other cases. Sanctions notifications to the ASO and AFP do not replace an SMR, and an SMR does not replace them.

Be careful about what you tell the client. DFAT permits you to tell a designated person or entity that an asset has been frozen in compliance with Australian sanctions laws. Under AML/CTF rules, you must not disclose that you have lodged an SMR or formed a suspicion.

6. Record everything

Keep a dated record of the screening result, the identifiers you compared, your conclusion, the assets frozen, when and how you notified the ASO and AFP, the legal advice obtained and any permit applications. Keep SMR records separately with restricted access.

An example from DFAT’s guidance

DFAT’s guidance note for real estate professionals describes an agency that realised it was holding client funds in its trust account that it believed were a controlled asset. The agency froze the funds straight away and notified both the ASO and the AFP. That is the pattern to follow: identify, freeze, notify, then take advice.

What a contravention can cost

Contravening an Australian sanctions measure is a serious criminal offence. According to DFAT, individuals face up to 10 years’ imprisonment and a fine of 2,500 penalty units or three times the value of the transaction, whichever is greater. Bodies corporate face a fine of 10,000 penalty units or three times the value of the transaction, whichever is greater.

For bodies corporate, sanctions offences are strict liability. A company can be found guilty without any proof that it intended to breach the law or knew it was doing so. It is a defence if the company can show it took reasonable precautions and exercised due diligence to avoid the contravention. Screening clients, reviewing matches properly and keeping records are the kinds of steps that support that defence.

When to check the list again

Designations change. A client who was clear at onboarding can be added later, and DFAT updates the Consolidated List as new designations are made. Re-screen clients at sensible intervals and before significant transactions, especially where the client has links to countries subject to Australian sanctions. Subscribing to DFAT’s sanctions updates can help you notice changes that affect your clients.

Frequently asked questions

Do sanctions laws apply if my business is not regulated by AUSTRAC?

Yes. Australian sanctions laws apply to everyone in Australia and to Australian citizens and bodies corporate overseas, regardless of AML/CTF status.

What counts as an asset I might have to freeze?

Any asset or property, tangible or intangible. For small firms, client money held in trust, deposits and documents connected with a transaction are the most likely examples.

Who do I notify about a frozen asset?

The Australian Sanctions Office, at asset.freezing@dfat.gov.au, and the Australian Federal Police, through the Report a crime form, as soon as possible.

Can I tell the client why I have stopped?

DFAT permits you to tell a designated person or entity that an asset has been frozen in compliance with Australian sanctions laws. Do not disclose any suspicious matter report you have lodged with AUSTRAC.

Is a match on an overseas sanctions list the same as a DFAT match?

Not necessarily. Lists such as those maintained by the US or the EU do not automatically create Australian legal obligations, although they may be relevant to your risk assessment and to other laws that apply to your business. Check the Australian position and seek advice where you are unsure.

How NameScan can help

NameScan screens individuals and entities against global sanctions lists, including Australian sanctions, alongside PEP and adverse media data, on a pay-as-you-go basis. Each check gives you a dated result to keep, and the dashboard lets you record your review and decision for every potential match.

Start screening with NameScan, or read our guide to how sanctions lists work.