Sanctions Compliance
Sanctions essentials
Sanctions are government restrictions on dealings with named persons, entities, sectors, or countries. Candidates must know the major regimes (UN, US OFAC, EU, UK OFSI) and the difference between primary sanctions and secondary sanctions, which can reach non-US persons for certain conduct. Core controls include screening customers, beneficial owners, counterparties, payments, and trade documents against consolidated lists; managing list updates; resolving fuzzy matches and false positives; blocking or freezing assets; reporting to the regulator; and obtaining licenses where permitted.
Traps
Sanctions are commonly strict-liability: intent or ignorance is usually no defense. The OFAC 50% rule provides that an entity owned 50% or more, directly or indirectly, in the aggregate by one or more blocked persons is itself blocked, even if it is not listed. Ownership is aggregated, and indirect ownership counts. Screening only at onboarding is insufficient; rescreening on list changes and at payment time matters. Rejecting and blocking differ: blocked property must be held and reported, not returned. Look-alike name matches must be resolved using identifiers such as date of birth, address, and nationality, not assumed cleared.
Worked example
Company A is 30% owned by SDN X and 25% owned by SDN Y, with the remaining 45% held by unrelated investors. Individually neither stake reaches 50%, but the aggregate blocked ownership is 55%, so Company A is treated as blocked under the OFAC 50% rule.