We are excited to launch our "Sanctions in Focus" series, featuring five concise posts that explore the challenges firms face in navigating the ever-evolving landscape of sanction management. This series will provide insights on how to strengthen your current sanction protocols, redefine your operational model, and implement cutting-edge technology to streamline and enhance labour-intensive sanction operations.
In the current highly volatile geopolitical climate, uncertainty surrounding future sanction regimes is putting huge pressure on internal teams. Clarisse Mallem and Rya Saunders explore practical ways to keep operations running smoothly in turbulent times.
Global Political Uncertainty
The first quarter of 2025 has been marked by unprecedented geopolitical uncertainty. In the few days it took to write, edit and publish this article, headline events have changed dramatically. Faced with the ever-changing US tariffs, US-Ukraine efforts to reach agreement on the use of rare earth elements, US-Russia peace talks, European military self-sufficiency efforts, Middle Eastern tensions, and China-Taiwan frictions, sanction management teams are struggling to articulate the external risks on sanctions.
We have been here before. In 2022, firms had to implement an unprecedented number of sanction packages against Russia almost overnight, putting enormous pressure on teams that were often ill-equipped to implement them in a uniform way. Workarounds and manual processes have left many firms exposed to operational risk and potential sanction violations.
In 2022, firms had to implement an unprecedented number of sanction packages against Russia almost overnight, putting enormous pressure on teams that were often ill-equipped to implement them in a uniform way.
Impact of Sanctions
Lessons learned from the Russian sanctions have driven companies to implement horizon scanning capabilities, to monitor geopolitical trends and anticipate future sanction regimes.
Some organisations are preparing for a worst-case scenario of implementing Chinese sanctions whilst simultaneously considering the operational challenges of un-freezing assets when the Russian sanctions are eventually lifted.
In such a turbulent landscape, organisations often find themselves having to manually remove temporary solutions from their systems. Companies with fragmented IT architecture may have plans in place to improve their systems and avoid these manual workarounds, but most of the upgrades are incomplete. One reason is that their domain specialists, those who are subject matter experts, are fully occupied implementing the latest sanction updates and have no capacity to support these system changes. Yet, these are changes that will enhance resilience and strengthen controls when it comes to either implementing or lifting sanction regimes.
In such a turbulent landscape, organisations often find themselves having to manually remove temporary solutions from their systems.
Team Challenges in Implementing (or Lifting) Sanctions
Horizon scanning is a risk management tool and an integral feature of the sanctions management process. It helps to identify the probability and impact of sudden increased demands on already stretched teams.
However, recruiting sanctions support teams is challenging. Almost all companies struggle to manage their ongoing screening requirements while potentially handling a significant number of frozen assets. It is not easy either to move personnel between different companies as each organisation, depending on risk appetite and specific circumstances, will have its own unique way of handling sanctions.
Recruiting sanctions support teams is challenging. Almost all companies struggle to manage their ongoing screening requirements while potentially handling a significant number of frozen assets.
Training new recruits can be a thankless task as the focus is more on understanding “how we do things around here” rather than adopting skills that can easily be replicated. Because of the shallow pool of resources, training often includes both broad sanction practitioner’s expertise plus the firm’s own standard operating procedures. Experts in this field are in such high demand that companies frequently take on recruits who have little or no sanctions experience.
The Outlook and Risk Mitigation
As the first quarter of 2025 ends, the continuing uncertainty surrounding sanctions means that organisations need a robust, pragmatic risk plan which can be adapted to respond to potential peaks in activities. Many organisations have triggered programmes aimed at streamlining processes and automating some of the sanctions’ monitoring and implementation tasks. Achieving this reduces operational risk and frees up internal experts to devote their time to high-risk, high-value tasks. But these programmes may not be completed within a realistic timeframe.
The continuing uncertainty surrounding sanctions means that organisations need a robust, pragmatic risk plan which can be adapted to respond to potential peaks in activities.
This would leave institutions exposed to sanctions risk with no credible plans to mitigate unexpected (or even expected) peaks in sanction activities. One viable solution is to outsource talent and bringing in experts to support internal teams during periods of stress. This approach allows a company to deploy experts, on demand, to address sanction peaks, tackle a backlog, or deal with large-scale remediation work and still have the flexibility to quickly grow or shrink their team’s capacity. Each company can have a bespoke plan, tailored to their risk appetite, solution architecture, maturity, and existing resource pool.
To respond to these challenges effectively, organisations must work to improve their sanctions’ management strategies. Calling in external experts allows them to strengthen internal teams and remain resilient at a time of global political uncertainty. Companies must safeguard their operations yet remain both compliant and efficient.
Over Projective Group
Projective Group is opgericht in 2006 en is een toonaangevende change specialist voor de financiële dienstverlening.
We worden binnen de sector erkend als een provider van complete oplossingen, die samenwerkt met klanten in de financiële dienstverlening om oplossingen te bieden die zowel holistisch als pragmatisch zijn. We hebben ons ontwikkeld tot een betrouwbare partner voor bedrijven die willen gedijen en bloeien in een steeds veranderend landschap van financiële dienstverlening.
Our unique recruitment and people management approach means that we can rapidly mobilise, train, and deploy a team to support either run-the-bank activities or ad-hoc remediation or implementation projects.
Projective Group has a deep talent pool trained in Financial Crime, Customer Due Diligence, and Sanctions. Our unique recruitment and people management approach means that we can rapidly mobilise, train, and deploy a team to support either run-the-bank activities or ad-hoc remediation or implementation projects. Our ongoing monitoring of the market environment ensures that our talent pool is always readily available and equipped to be rapidly deployed to support our clients’ emerging challenges.