Daily Compliance Brief — Sanctions Screening Expectations Tighten on Indirect Exposure

January 22, 2026

Signal

Supervisory statements and regulatory communications over the last 24 hours reinforced heightened expectations around identification of indirect sanctions exposure, including through intermediaries, subsidiaries, and complex ownership or control structures. Authorities emphasised that reliance on basic name-matching controls is increasingly insufficient in higher-risk contexts.

Regulators pointed to continued weaknesses in how institutions assess control, influence, and economic benefit when sanctioned parties are not directly named counterparties. Attention is shifting toward whether firms can evidence reasonable steps to detect circumvention risk across customer relationships, payments chains, and third-party arrangements.

Why it matters

For compliance teams, this raises the bar on sanctions screening frameworks, requiring stronger integration between screening, customer due diligence, and ownership analysis. Gaps between sanctions controls and beneficial ownership or third-party risk assessments may be treated as material weaknesses.

Institutions may need to enhance escalation criteria, expand use of contextual data in sanctions decision-making, and reassess governance over sanctions risk assessments. Failure to address indirect exposure risks increases supervisory scrutiny, remediation demands, and potential enforcement where sanctioned activity is facilitated indirectly.