Sanctions & Compliance Guide
A practitioner's reference for cross-border sanctions screening and trade-based money laundering (TBML) red flags. Screen every party, asset and route - not just the counterparty.
Golden rule: a sanction attaches to a name, a vessel, a port, or a good - never assume screening one axis clears the transaction.
This guide is educational; it is not legal advice. Screen using an authoritative provider (Dow Jones Watchlist, Refinitiv World-Check, LexisNexis Bridger) before executing any transaction, and document your screening result for audit.
Major sanctions regimes
| Regime |
|---|
OFAC US OFAC - Specially Designated Nationals (SDN) |
EU EU Consolidated Financial Sanctions List (CFSP) |
UN UN Security Council Consolidated List |
UK UK OFSI Consolidated List |
CH Swiss SECO Sanctions |
Screening checkpoints
- • Applicant / Buyer
- • Beneficiary / Seller
- • Ultimate Beneficial Owners (UBOs) ≥25%
- • Directors and signatories
- • Advising / Confirming / Negotiating banks
- • Reimbursing bank and correspondent chain
- • Freight forwarder, carrier, master of vessel
- • Vessel IMO number (Equasis, vessel sanction lists)
- • Flag state and previous flags (flag-hopping = red flag)
- • Ports of loading, transhipment, discharge
- • Bank correspondent chain in SWIFT MT202
- • Payment currency and clearing centre
- • HS code vs. dual-use control lists (EU Reg. 2021/821, US EAR 15 CFR 730-774)
- • End-user and End-use certificate (EUC) for military/nuclear/chem-bio potential
- • Origin restrictions (e.g. Russian oil price cap, embargo goods)
- • Sectoral sanctions (energy, defence, tech)
Red flags (TBML & fraud)
- ⚠ Ship-to-ship transfer with AIS transponder switched off
- ⚠ Vessel routes deliberately obscured or reflagged mid-voyage
- ⚠ Payment via a shell company in a high-secrecy jurisdiction
- ⚠ Price grossly below or above market (trade-based money laundering)
- ⚠ Complex letter of credit chains with no economic rationale (transferable, back-to-back, assignment of proceeds stacked)
- ⚠ Buyer insists on non-documentary conditions in the LC (UCP Art. 14(h) - banks disregard, but they signal a hidden agenda)
- ⚠ 'Prime bank instrument', 'fresh cut SBLC', 'MT760 for lease' - 100% fraud vocabulary
- ⚠ Sudden change of consignee or discharge port after LC issuance
- ⚠ End-user in a jurisdiction with no logical demand for the goods
Frequently asked questions
Which sanctions lists must exporters screen against?
At minimum: OFAC (US SDN, sectoral, 50%-rule), EU consolidated list, UK OFSI, UN Security Council, and the destination country's own list. Dual-use goods add EU Regulation 2021/821, US EAR, and country-specific export control lists. Screening covers buyer, consignee, notify party, vessel, and end-use.