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 Sanctions List (FCDO), the single source since 28 Jan 2026 |
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
Where does sanctions screening sit in a trade workflow?
Graham Act (signed 18 Sep 2026) and EO 14436 (16 Oct 2026, 91 FR 66627): 500% additional duty on Russian goods and 100% on goods from certain buyers of Russian oil/gas and evasion facilitators were enacted, but are WAIVED under Sec. 4 of the order as of 21 Oct 2026 and are not collected. The waiver can be withdrawn. Federal Register
The pre-contract compliance workflow
- Screen the counterparty, vessel and route. Names, UBOs above 25%, IMO number, flag history, load and discharge ports, and the correspondent bank chain. Record the screening result and date for audit. Start with the Sanctions Name Screening (OFAC & EU) tool.
- Check the Incoterm risk. A term that puts the seller in control of carriage (CIF, CIP, DAP, DDP) makes the seller responsible for vessel and route choice, which is where vessel-level designations bite. Map it with the Incoterms 2020 cost and risk table.
- Price the payment instrument. Confirmation pricing moves with country and bank risk, so screen before you model cost with the LC cost calculator, then check the draft credit with the LC application checklist.
Designations, price caps and tariff actions shift weekly. For a current read before you commit to a structure, Trade Expert AI answers with a daily-updated sanctions and tariff intelligence brief.
Authoritative list sources: US Treasury OFAC, EU Council CFSP consolidated list, UN Security Council consolidated list, UK Sanctions List (FCDO), Swiss SECO. Last reviewed October 2026.
OFAC SDN data as of 21 Oct 2026 · OFAC Consolidated data as of 19 Oct 2026 · EU data as of 23 Oct 2026 · refreshed 27 Oct 2026
Numerical Example: SDN Screening Check
A match on the SDN list requires an immediate hold and reporting to the relevant authority.
Need help interpreting this result?
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Frequently asked questions
Which sanctions lists must exporters screen against?
At minimum: OFAC (US SDN, sectoral, 50%-rule), EU consolidated list, UK Sanctions List (FCDO), 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.