Sanctions Compliance: OFAC, EU, UN Regimes, and Screening Best Practices
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Key Insights
- Sanctions compliance requires institutions to screen customers, transactions, and counterparties against multiple sanctions lists with overlapping jurisdictions.
- This module covers sanctions types (comprehensive vs targeted, primary vs secondary, sectoral), major regimes (OFAC, EU, UN, UK OFSI), screening methodology (fuzzy matching, name variations, false positive optimization), the intersection of sanctions with AML, and 2025-2026 trends including the expansion of Russia-related sanctions, secondary sanctions risk for non-US institutions, AI-based screening reducing false positives by 90%, and the growing complexity of sanctions compliance for digital assets.
Overview
Sanctions regimes have proliferated globally, with the US, EU, UK, UN, and numerous individual countries maintaining active sanctions programs. Each regime has distinct legal frameworks, designation lists, and compliance requirements. Financial institutions must screen against multiple regimes simultaneously, often with conflicting or overlapping requirements.
Key sanctions programs include US OFAC sanctions (comprehensive programs against Iran, North Korea, Syria, Cuba, and Russia, plus numerous targeted designations), EU restrictive measures, UK OFSI sanctions, and UN Security Council resolutions. Sanctions can be comprehensive (country-wide), sectoral (specific industries), or targeted (individuals and entities).
Key Concepts
- OFAC Sanctions: US sanctions programs administered by the Office of Foreign Assets Control, including country, sectoral, and targeted designations.
- EU Restrictive Measures: EU sanctions including asset freezes, travel bans, and sectoral restrictions adopted by the Council.
- UK OFSI: The Office of Financial Sanctions Implementation, responsible for enforcing UK financial sanctions.
- UN Security Council Sanctions: Mandatory sanctions adopted under Chapter VII of the UN Charter, binding on all member states.
- Secondary Sanctions: US sanctions that target non-US persons for activities involving sanctioned countries or entities.
Key Takeaways
- Multiple overlapping sanctions regimes require institutions to screen against numerous lists simultaneously.
- OFAC administers the most comprehensive US sanctions program with extraterritorial reach.
- EU and UK sanctions have distinct legal frameworks and designation processes.
- Secondary sanctions extend US enforcement jurisdiction to non-US persons and transactions.
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Feynman Concept Cards
Master each building block: read the ELI5, explore the analogy, work the example, find your gaps, teach it back, build it.
Bank Secrecy Act is a concept in regulations. In simple terms, Bank Secrecy Act covers regulatory frameworks in Compliance. This compliance concept addresses key topics in the regulatory frameworks in compliance domain. Also known as: BSA, Currency and Foreign Tr
Analogy
Example
Find Gaps
Explain Bank Secrecy Act as if teaching a colleague who is new to regulations. Cover: what it is, how it works, and why it matters.
Create
Create a diagram that demonstrates Bank Secrecy Act in a real-world regulations scenario. Walk through your design decisions.
Show solution
A diagram for Bank Secrecy Act should include: 1. The core components of bsa 2. How they interact 3. Expected outcomes or outputs
Global Sanctions Regimes is a concept in sanctions. In simple terms, Global Sanctions Regimes covers sanctions compliance in Compliance. This compliance concept addresses key topics in the sanctions compliance in compliance domain. Also known as: OFAC, EU sanctions, UN
Analogy
Example
Find Gaps
Explain Global Sanctions Regimes as if teaching a colleague who is new to sanctions. Cover: what it is, how it works, and why it matters.
Create
Create a code that demonstrates Global Sanctions Regimes in a real-world sanctions scenario. Walk through your design decisions.
Show solution
A code for Global Sanctions Regimes should include: 1. The core components of global sanctions 2. How they interact 3. Expected outcomes or outputs
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Screen customers against a sanctions list
BeginnerA sanctions watchlist contains the names 'Viktor Petrov', 'Elena Volkov', and 'Omar Haddad'. Write a query that returns the customer name, jurisdiction, and risk rating of every customer whose name is on the list, using an IN check. Order by name.
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