Daily Compliance Brief — Supervisors Emphasise Trade Finance Controls as Sanctions Evasion Risk Persists

January 28, 2026

Signal

Supervisory statements and public remarks over the last 24 hours reinforced concerns that trade finance remains a persistent channel for sanctions evasion and related financial crime. Authorities referenced ongoing deficiencies in the assessment of underlying trade activity, particularly where documentation is complex, fragmented, or reliant on intermediaries.

Regulators reiterated that traditional screening focused solely on counterparties is insufficient in trade-based contexts. Increased attention is being placed on the consistency between goods, shipping routes, pricing, and counterparties, as well as the ability of firms to identify red flags linked to diversion, misrepresentation, or concealed sanctioned exposure.

Why it matters

For compliance teams, this underscores the need to strengthen trade finance-specific controls beyond standard sanctions and transaction screening. Weaknesses in document review, escalation of anomalies, or integration between trade operations and compliance functions can expose firms to elevated sanctions and enforcement risk.

Institutions should reassess risk-based segmentation of trade finance activity, the effectiveness of red flag frameworks, and governance over higher-risk corridors and commodities. Supervisory scrutiny is increasingly focused on whether firms can demonstrate a credible understanding of the underlying trade, not just the financial flows associated with it.