Sanções

Key points

• Sanctions are legal restrictions imposed by governments or international bodies on individuals, entities, or countries.
• They can prohibit or limit transactions with the listed targets, and financial providers must comply with them.
• Screening customers and operations against sanctions lists is a core part of compliance, including in crypto.

What are sanctions?

Sanctions are restrictive measures adopted by governments or international bodies against certain individuals, companies, sectors, or countries, generally for reasons of security, foreign policy, or combating illicit activity. In financial practice, they translate into prohibitions or limitations on transactions with the designated targets, who are usually listed on official lists. Complying with these restrictions is a legal obligation for financial institutions.

How it works

The competent authorities publish and update sanctions lists, indicating who or what is subject to restrictions. Financial institutions must screen their customers and operations against these lists, both when starting a relationship and on an ongoing basis, to identify whether any involved party is designated. When there is a match, the institution must act according to the applicable rule, which may mean blocking the operation, refusing the relationship, or reporting it to the authorities.

Sanctions compliance is a sensitive part of compliance, with serious consequences in case of noncompliance. Unlike other checks, a transaction with a sanctioned party can be flatly prohibited, not merely subject to additional scrutiny. For this reason, screening against sanctions lists is usually integrated into customer identification and monitoring processes, alongside anti-money laundering prevention and attention to politically exposed persons.

In the crypto space, this topic is especially delicate. Regulated providers need to ensure they are not processing operations involving sanctioned parties, which requires checks that must contend with the pseudonymous nature of blockchains. Address analysis tools and customer screening help with this task. The lists, competent authorities, and required procedures vary by jurisdiction and change frequently, so it is up to each institution to keep track of them and comply according to the rules in force.

Understanding what sanctions are helps explain why financial providers screen customers and operations against official lists.

Why it matters

Understanding sanctions helps explain why financial providers need to screen customers and operations against official lists, and why noncompliance is serious. For a company in the sector, this is a core compliance obligation. This is an educational explanation and does not represent legal or compliance guidance of any kind.

Risks and limitations

Complying with sanctions requires ongoing checks against lists that change frequently, and the pseudonymous nature of blockchains makes screening harder. Noncompliance can have serious consequences. The lists, authorities, and procedures vary by jurisdiction. This text is educational and does not replace professional guidance or the official rules applicable to each case.