Economic sanctions have become one of the most operationally demanding areas of legal compliance. The continued growth of sanctions in recent years has outpaced what most compliance functions were designed to handle.
What was once a periodic screening exercise has become a continuous, cross-jurisdictional monitoring obligation – one that carries real financial and reputational consequences for organizations that fall behind. In a rapidly evolving and increasingly complex sanctions landscape, ongoing monitoring across geographies is essential. Understanding how to leverage technology and specialist expertise effectively is now a core requirement for legal operations.
Sanctions Growth by the Numbers
Data on economic sanctions shows how they have become a central tool of modern foreign policy, rising nearly ninefold between 2000 and 2021, particularly following Russia’s 2014 annexation of Crimea. The 2022 invasion of Ukraine further accelerated their use. As of March 2025, over 82,000 individuals and entities were subject to sanctions worldwide.
Sanctions carry a measurable economic weight, including through export controls. The total penalties and settlements imposed by the U.S. exceeded $265 million in 2025 versus roughly $49 million in 2024. The UK froze £22.5 billion of Russian assets in 2024–25, bringing the cumulative total to £28.7 billion by May 2025. A June 2024 US Bureau of Industry and Security (BIS) rule targeted over 500 Russian and Belarusian industrial items, while a September 2025 expansion extended Entity List restrictions to entities 50% or more owned by listed parties.
What's Happening Right Now
Recent geopolitical developments are reshaping how sanctions are designed and enforced. The Iran–Israel escalation, layered onto the Russia–Ukraine conflict, is disrupting the landscape. Sanctions are shifting toward a more multipolar system, with multiple jurisdictions shaping outcomes.
Sanctions growth stood at 17.1% YoY in March 2025, with the index up 446% since 2017, pointing to continued but moderating expansion. Growth is slowing across the EU (10.5%), Canada (9.6%), Switzerland (9.5%), the UK (7.4%), and Japan (4.6%). In the U.S. (21.3%), the Office of Foreign Assets Control (OFAC) remains a key driver, while China has surged at 153%, highlighting increasing divergence in global sanctions trends. As different jurisdictions pursue more independent strategies, that adds further cross-border compliance complexity for multinational firms.
For businesses, these shifts translate directly into risk. OFAC took 14 enforcement actions in 2025, with total penalties exceeding $265 million, focusing on non-bank gatekeepers such as private equity firms, real estate companies, and lawyers, while also pursuing individuals, signalling that personal liability is a growing risk. OFAC also targeted manufacturers and logistics providers involved in diversionary sales to Iran, Venezuela, and Cuba.
Why Continuous Monitoring is Essential
Keeping pace with sanctions developments is operationally demanding. OFAC enforcement across 2023–24 exceeded $1 billion in penalties. In the UK, the Office of Financial Sanctions Implementation (OFSI) recorded 394 suspected breaches in 2024–25, closing 214 cases and taking 57 enforcement actions, with most identified proactively rather than through self-reporting.
Regulatory expectations have risen significantly, with authorities requiring organisations to maintain controls that are not only effective but also transparent and regularly tested.
The challenge is compounded by the volume and fragmentation of data. Sanctions updates are issued frequently across multiple sources, and even minor changes can have immediate compliance implications. Missing a single update can expose organizations to financial penalties, reputational damage, and legal risk.
For companies operating across jurisdictions, tracking, validating, and acting on this information requires both specialized expertise and dedicated infrastructure. It is no longer a periodic exercise – it is an ongoing function.
How to Leverage Technology and Identify the Limitations
A practical framework for sanctions compliance begins with mapping your exposure: identify all jurisdictions in which your organisation operates, sources of counterparty risk, and the sanctions regimes most likely to affect your business. From there, organizations can build a layered approach that combines technology, internal processes, and external expertise – each addressing gaps the others cannot fill alone.
The first layer is technology. Screening and monitoring tools can dramatically reduce manual effort and improve consistency, but they are not a complete solution. Technology is only as good as the data it ingests: if the underlying sanctions lists, ownership registries, or adverse media feeds are incomplete or delayed, automated screening will produce false confidence.
Firms should also be aware that many off-the-shelf tools struggle with complex ownership structures, transliterated names, or rapidly changing designation data – areas where human review remains essential. AI-assisted pattern detection can surface anomalies, but it can also generate noise, and alert fatigue is a genuine operational risk if thresholds and workflows are not carefully tuned.
The second layer is process and governance. Technology investments often fail without clear ownership structures, such as designating a responsible function (legal, compliance, or a dedicated sanctions officer), establishing escalation protocols, and scheduling regular audits of screening configurations and policy alignment. Firms that rely on technology alone, without documented human review at key decision points, frequently struggle to demonstrate defensible compliance in enforcement proceedings.
The third layer is external partnership. Given the depth of jurisdictional knowledge required – understanding not just who is listed, but why, and how related-party and ownership rules apply – many organizations benefit from working with a specialist research or managed services partner that can help identify potential gaps in the compliance function.
There are several common pitfalls to avoid, including:
- Treating initial onboarding screening as sufficient without ongoing monitoring.
- Neglecting to test screening configurations regularly against known-positive cases.
- Assuming that a single vendor’s list coverage is comprehensive across all relevant jurisdictions.
- Failing to document the rationale behind screening decisions and escalations, which is increasingly scrutinised in enforcement reviews.
Bridging the Gaps to Achieve Comprehensive Sanctions Compliance
In practice, each of these three layers relies on specific tools and capabilities that vary based on an organization’s footprint and needs. As enforcement activity continues to increase, technology solutions support legal teams in keeping pace with change while demonstrating strong and defensible compliance processes.
Working with an experienced partner is particularly valuable for complex due diligence on high-risk counterparties, interpreting novel designation language, or maintaining coverage across jurisdictions where in-house expertise is thin. These partners supplement technology rather than replacing it, providing the analytical judgement that automated tools are not designed to offer.
