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Sanctions Meaning definition and meaning | AML glossary

What are sanctions? Definition and AML compliance meaning.

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Sanctions definition: What it means in AML compliance.

Sanctions are restrictive measures imposed by governments or international bodies to influence the behaviour of individuals, entities, or nations. These measures are used to enforce international law, prevent financial crime, and respond to threats such as terrorism, money laundering, and human rights violations.

Types of sanctions.

Sanctions can take various forms, including:

  • Financial sanctions: Freezing assets or restricting financial transactions involving targeted individuals, companies, or governments.
  • Trade sanctions: Limiting or banning the export, import, or trade of certain goods and services.
  • Travel bans: Prohibiting individuals from entering or leaving specific countries.
  • Arms embargoes: Restricting the sale or supply of weapons and military equipment.
  • Sectoral sanctions: Targeting specific industries, such as energy, finance, or technology, within a sanctioned country.

Who imposes sanctions?

Sanctions are enforced by national and international authorities, including:

Top sanctioned countries globally.

As of 2024/5, the countries facing the highest number of international sanctions are:

  • Russia: Following its 2022 invasion of Ukraine, Russia has become the most sanctioned nation globally, with over 14,000 sanctions imposed by entities such as the United States, European Union, and other international bodies. These sanctions target individuals, entities, and sectors critical to Russia’s economy and military operations. 
  • Iran: Historically subjected to extensive sanctions due to its nuclear program and support for militant groups, Iran continues to face significant international restrictions. In 2024, an additional 439 sanctions were imposed, addressing concerns related to its backing of organisations like Hamas and its involvement in supplying arms to Russia.
  • Belarus: Ally to Russia during the Ukraine conflict, Belarus has been subjected to increased sanctions, with 229 new designations in 2024. These measures primarily address its support for Russia’s military actions and internal political repression.
  • Syria: Enduring sanctions related to its prolonged civil war and human rights violations, Syria remains among the top sanctioned countries.
  • North Korea: Subject to longstanding sanctions due to its nuclear weapons program and recent military support to Russia, including the provision of ammunition and ballistic missiles.
  • Sudan: In 2024, Sudan faced 69 new sanctions, primarily targeting individuals and entities responsible for ongoing violence and instability in regions like Darfur.
  • Democratic Republic of Congo (DRC): The DRC saw 59 new sanctions in 2024, focusing on human rights abuses and persistent conflict in the eastern part of the country.
  • China: While not traditionally among the most sanctioned, China faced increased scrutiny in 2024, with 276 new sanctions. These were largely due to its alleged support for Russia’s military efforts and concerns over human rights issues.
  • Venezuela: Continues to be under sanctions related to its political situation and human rights record.
  • Myanmar (Burma): Faces sanctions due to military actions and human rights violations following the 2021 coup.

These sanctions reflect the international community’s response to various geopolitical events, human rights concerns, and violations of international law.

Why sanctions matter in AML compliance.

Sanctions play a key role in Anti-Money Laundering (AML) and counter-terrorism financing (CTF) efforts. Businesses, particularly in financial services, must comply with sanctions regulations to avoid significant fines, reputational damage, and legal consequences. Non-compliance can result in penalties reaching millions of pounds.

How businesses can stay compliant with sanctions .

To comply with sanctions laws, businesses must:

  • Conduct sanctions screening of customers, suppliers, and transactions.
  • Monitor updates to sanctions lists to ensure ongoing compliance.
  • Report any sanctions breaches to regulatory authorities.
  • Implement automated compliance tools to streamline sanctions screening and reduce risk

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