How Financial Institutions Can Stay Ahead of Global Sanctions | GBAF

How Financial Institutions Can Stay Ahead of Global Sanctions | GBAF

Editorial & Advertiser disclosure

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

Home > Top Stories > Challenges and Opportunities Posed by New Sanctions

Challenges and Opportunities Posed by New Sanctions

Published by Gbaf News

Posted on July 13, 2018

7 min read

Last updated: January 21, 2026

Mike Ashley, founder of Frasers, fails to secure a position on the Boohoo board - Global Banking & Finance Review — This image depicts Mike Ashley, founder of Frasers, who recently failed to win a seat on the Boohoo board. This development comes as the Bank of Japan maintains steady interest rates, highlighting the ongoing economic challenges in the finance sector.

While the imposition of sanctions may primarily bring to mind effects on the world’s political institutions, the ever-changing landscape of sanctions has a profound effect on global financial institutions as well. Oliver Bodmer of SIX’s sanctions compliance division examines precisely why it is critical that financial institutions enact processes that enable them to seamlessly comply with existing sanctions and to quickly align with new ones to stay ahead of the curve and be ready to act.

We’re only halfway through 2018, but this year has already presented a whirlwind of challenges for sanctions compliance teams. Just a few weeks ago, the U.S. Treasury announced sanctions on six of the 92 powerful Russian oligarchs originally identified under CAATSA section 241 as potentially sanctioned individuals. The recent withdrawal of the United States from the Iran nuclear deal now adds a bevy of regulatory obligations for compliance departments. Factor in U.S. sanctions against Venezuela and an uncertain situation in North Korea, and it’s easy to see why compliance teams are feeling more challenged than ever before, particularly as the reach of secondary sanctions adds a layer of complexity to their effects on the global financial system.

Governments find sanctions to be effective foreign policy tools for targeting powerful institutions, corporations and individuals operating in specific economic sectors of any given country.

But global financial institutions say complying with the proliferation of U.S. sanctions activity is burdensome and demanding. Compliance teams must store and analyze massive amounts of constantly changing data associated with the underlying structure of a security and its shareholder value while also remaining current on all corporate actions that may change the status of the instrument.

Smart financial institutions understand that it is not enough to simply be aware of potential sanctions and stay ready to comply with them. It is equally important to have systems and processes in place to accurately gather and translate voluminous amounts of financial data to track risky securities and safeguard client portfolios. When institutions receive indications that individuals or businesses are likely to be subject to upcoming sanctions, they need to be able to act. Being ahead of the curve on sanctions is essential for responding quickly and effectively.

Cutting ties with sanctioned Iranian businesses and banks within the allotted 180-day period is a daunting and laborious task for compliance departments, particularly since they have just addressed the strengthened sanctions against Russia. Each round of sanctions responses requires data-intensive work in a short period of time. Prescient financial institutions will have safeguarded their businesses with databases and processes that are sophisticated and nimble enough to quickly align with regulations before falling victim to significant consequences.

Institutions must also be prepared to deal with the ripple effect caused by America’s use of secondary sanctions against companies that do business with Iran. Because of these sanctions, foreign organizations that have significant relationships with targeted entities in Iran may themselves become subject to U.S. sanctions, causing reverberations across the global financial system. Institutions must not only track their exposure to the instruments affected by primary sanctions, but also their exposure to other institutions that are heavily involved with the sanctioned entities. This vastly expands the slate of instruments that must be monitored in order to stay ahead of the curve. While the EU has floated the idea of a counter-secondary sanction law that protects EU businesses, firms still need to respect secondary sanctions for the moment to be on the safe side. At the very least, they must be aware of these sanctions in order to balance between U.S. and Iran trade relations.

The flurry of sanctions activity over the past several months represents another challenge and opportunity for institutions to address their data and processes. Financial institutions operating globally are inherently subject to geopolitical risk and reward, and no risk is quite as obvious as sanctions noncompliance. The confluence of sanctions against Russia, with its highly liquid market and, now, Iran, with 1,000 sanctioned entities and more than 860 sanctioned financial products, prove that access to an all-encompassing, continuously updated database of potentially affected instruments is critical for compliance.

While the imposition of sanctions may primarily bring to mind effects on the world’s political institutions, the ever-changing landscape of sanctions has a profound effect on global financial institutions as well. Oliver Bodmer of SIX’s sanctions compliance division examines precisely why it is critical that financial institutions enact processes that enable them to seamlessly comply with existing sanctions and to quickly align with new ones to stay ahead of the curve and be ready to act.

We’re only halfway through 2018, but this year has already presented a whirlwind of challenges for sanctions compliance teams. Just a few weeks ago, the U.S. Treasury announced sanctions on six of the 92 powerful Russian oligarchs originally identified under CAATSA section 241 as potentially sanctioned individuals. The recent withdrawal of the United States from the Iran nuclear deal now adds a bevy of regulatory obligations for compliance departments. Factor in U.S. sanctions against Venezuela and an uncertain situation in North Korea, and it’s easy to see why compliance teams are feeling more challenged than ever before, particularly as the reach of secondary sanctions adds a layer of complexity to their effects on the global financial system.

Governments find sanctions to be effective foreign policy tools for targeting powerful institutions, corporations and individuals operating in specific economic sectors of any given country.

But global financial institutions say complying with the proliferation of U.S. sanctions activity is burdensome and demanding. Compliance teams must store and analyze massive amounts of constantly changing data associated with the underlying structure of a security and its shareholder value while also remaining current on all corporate actions that may change the status of the instrument.

Smart financial institutions understand that it is not enough to simply be aware of potential sanctions and stay ready to comply with them. It is equally important to have systems and processes in place to accurately gather and translate voluminous amounts of financial data to track risky securities and safeguard client portfolios. When institutions receive indications that individuals or businesses are likely to be subject to upcoming sanctions, they need to be able to act. Being ahead of the curve on sanctions is essential for responding quickly and effectively.

Cutting ties with sanctioned Iranian businesses and banks within the allotted 180-day period is a daunting and laborious task for compliance departments, particularly since they have just addressed the strengthened sanctions against Russia. Each round of sanctions responses requires data-intensive work in a short period of time. Prescient financial institutions will have safeguarded their businesses with databases and processes that are sophisticated and nimble enough to quickly align with regulations before falling victim to significant consequences.

Institutions must also be prepared to deal with the ripple effect caused by America’s use of secondary sanctions against companies that do business with Iran. Because of these sanctions, foreign organizations that have significant relationships with targeted entities in Iran may themselves become subject to U.S. sanctions, causing reverberations across the global financial system. Institutions must not only track their exposure to the instruments affected by primary sanctions, but also their exposure to other institutions that are heavily involved with the sanctioned entities. This vastly expands the slate of instruments that must be monitored in order to stay ahead of the curve. While the EU has floated the idea of a counter-secondary sanction law that protects EU businesses, firms still need to respect secondary sanctions for the moment to be on the safe side. At the very least, they must be aware of these sanctions in order to balance between U.S. and Iran trade relations.

The flurry of sanctions activity over the past several months represents another challenge and opportunity for institutions to address their data and processes. Financial institutions operating globally are inherently subject to geopolitical risk and reward, and no risk is quite as obvious as sanctions noncompliance. The confluence of sanctions against Russia, with its highly liquid market and, now, Iran, with 1,000 sanctioned entities and more than 860 sanctioned financial products, prove that access to an all-encompassing, continuously updated database of potentially affected instruments is critical for compliance.