UNICORN PRIVATE Sanctions risks for software and SaaS companies: what to check
In short
Software and SaaS companies sell online to customers in many countries, often without meeting them.
The main risks are listed customers, users in sanctioned countries and software or services covered by restrictions.
Screen customers and their owners against the sanctions lists and check the countries where your service is used.
Typical sanctions risks in this industry
- Selling subscriptions to customers who are listed or owned by listed persons.
- Providing the service to users in countries subject to broad sanctions.
- Software with encryption or other features covered by export controls.
- Some regimes restrict the supply of certain software and IT services to specific countries.
- Resellers and partners who sell your service to sanctioned parties.
Recommended checks
- Screen customers, owners and resellers against the sanctions lists at sign up and every day after.
- Check billing details and access locations for countries subject to sanctions.
- Classify your software for export controls, especially features with encryption.
- Add clauses on sanctions in your terms and in your contracts with resellers.
- Keep records of the checks and of the decisions taken.
Official sources
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Frequently asked questions
Do sanctions apply to software sold online?
Yes. Sanctions prohibit making services and economic resources available to listed parties, and some regimes restrict software and IT services to specific countries.
Is software covered by export controls?
Some software is, for example software with certain encryption features, under the EU dual use rules and the US Export Administration Regulations.
How can a SaaS company check thousands of customers?
With an automatic screening that compares every customer against the lists at sign up and every day after.
The program can make mistakes. The final responsibility for compliance stays with your company. Unicorn Intelligence is an information tool. Decisions and legal obligations, including sanctions compliance, due diligence and tender participation, remain with the customer.
Unicorn Intelligence checks your clients and suppliers against the sanctions lists every day.