Why Sanctions Screening is Harder than Ever and How to Keep Up.

Key Takeaways:

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Sanctions compliance is under unprecedented scrutiny. With conflicts escalating and alliances shifting, regulators are imposing record fines on institutions that fail to keep pace. 

During the summer of 2025 alone, OFAC issued USD 222 million in total penalties against three companies for violating sanctions against Russia, Iran, Venezuela, and Cuba. This came right after last year’s record-breaking USD 4.3 billion fines for Binance from OFAC and FinCen.^1,2,3

With enforcement intensifying, businesses need a proactive approach: real-time detection, risk-based monitoring, and systems that can keep pace with volatile lists and evolving evasion tactics. 

Evolving Sanctions Evasion Tactics

• Complex Networks

These are tactics like shell companies, layered ownership and the infamous Russian shell game. Russian oligarch Oleg Deripaska used shell firms and layered ownership to unfreeze USD 1.5 billion but OFAC uncovered the scheme in May 2024.⁴

• Aliases & Relatives

Sanctioned parties use their extended relatives or other proxies to evade sanctions. Hezbollah financier Nazem Saïd Ahmad used relatives, aliases and front companies to transfer funds.⁵

Russian oligarchs Viktor Perevalov and Valeri Abramov used a Miami real-estate firm to transfer luxury condos to relatives. OFAC fined the real-estate firm over USD 1 million.⁶

• VASPSs & Crypto Assets

The peer-to-peer (P2) decentralized nature of cryptocurrency is becoming conducive to money transfers outside the traditional financial system. Russian entities exploit Kyrgyzstan’s VASPSs and their rouble-pegged stablecoin to move large funds, exploiting weak oversight.⁷

OFAC also blocked the crypto wallet of digital assets company Copper Technologies used by Israeli Russian arms dealers.⁸

• Trade-Based Schemes

Methods such as false invoicing, route manipulation, disguised dual-use goods are also on the rise. Russian nationals falsified shipping documentations to ship dual-use semiconductors and smuggle millions of barrels of oil. In October 2022, all parties were arrested.⁹ 

• Russian Shadow Fleet

Russia’s shadow fleet of around 900–1,400 ageing tankers (many over 18–20 years old and often operating without credible insurance or under opaque ownership) carried about 5.5 million tons of oil products from Baltic ports in December 2024 at prices above the G7 cap. Analysts estimate these shipments have generated roughly €25 billion in revenue since 2022, financing Russia’s war. The fleet’s weak insurance/ownership transparency also heighten environmental risks across NATO waters, with no clear party liable in case of an accident.¹⁰

Why Screening is Harder Than Ever

In August 2025, FATF released its Mutual Evaluation Report for Germany stating that screening solutions were old and not working in real-time, making them unable to meet today’s challenges.¹¹ Outdated or poorly implemented technologies make screening even more challenging.

Add to that 57,000 active sanction records across 300+ programs as of 2025,¹² frequent changes, differences across jurisdictions, large volumes of complex data from international sources, and a hefty number of false positives, sanctions compliance has become difficult.  

Sanctions screening today is so much more challenging because: 

• EU Instant Payment Regulation: Since EU’s IPR came into effect, businesses have milliseconds to decide whether to reject a transaction and no time for batch checks. This is creating a compliance vs. speed chokehold for screening.  

• High Volume and Velocity: With SEPA and FedNow, global payment rails are faster, and transaction numbers are much higher. Old, inefficient screening systems simply cannot keep up, either missing alerts or creating delays.  

• Data Quality Gaps: FATF and EU reviews show that institutions are still dealing with siloed data, falsified KYC details, and incomplete data. The poor data quality can bring even modern screening solutions to its knees, leading to failure to impose sanctions and hefty fines.  

• Volatile Sanctions Lists: OFAC, EU, UN and other regulators are updating their lists daily, even hourly, especially for regions of conflicts. Without real-time screening systems it’s all but impossible to enforce sanctions.  

• Wire Stripping: Recently, banks like Standard Chartered and BNP Paribas were accused of processing transactions with stripped SWIFT messages from places like Iran. Without proper identifiers, it’s difficult to carry out sanctions screening. 

• Name-Matching Pitfalls: Cultural name variations, transliteration issues, and aliases are hard to detect without robust fuzzy name matching tools, enabling perpetrators to slip under the sanctions radar.  

• High False Positives: OFAC and EU regulators have also cited a high number of false positives due to inefficient systems and poor screening logic. False positives increase evasion risks, waste compliance resources, and detract from actual risks.  

Best Practices for Effective Sanctions Compliance 

Institutions are not powerless against evolving sanctions but need to adopt the following practices to significantly reduce risk:  

• Real-Time Screening: Daily or batch screening isn’t enough because it can miss emergency updates. Since the 2022 invasion of Ukraine, OFAC and EU are updating lists hourly. The EU has already warned instant payment processors of the risks of breaching sanctions. Further, FATF’s German Review highlighted the importance of “improved operational implementation and better timelines.”

• Holistic Approach: Sanctions screening is less effective as a standalone task and needs a holistic approach combined with KYC, transaction monitoring, and case management. Since payment information is by itself barebone and insufficient to screen for sanctions (without raising too many false positives), it needs to be enriched with customer profile and KYC information to get an up-to-date picture at any moment. In fact, the MER Germany 2025 criticized the lack of use of enriched data like customer profile in screening.

• Coverage Across Regimes: Screening needs to consider multiple watchlists and cross-border obligations. The FCA’s Standard Chartered wire stripping is a case study in failure to do so. The bank failed to apply similar sanction control across its non-US and UK branches, especially in UAE.  

• AI-Driven Precision: Advanced AI will reduce false positives while ensuring no critical hit is missed. AI is also important for fuzzy name matching. The Germany FATF report calls out the need to adapt, use modern technology for better use of data and analytics to catch out evaders.  

• Explainability and Auditability: Regardless of what technology is used, decisions must be transparent and recorded for regulators. Both FCA and FATF have emphasized the need for transparency, coordination, auditable decision-making, and consistent application of rules across jurisdictions.  

How Siron^®One Tackles Sanctions Screening Challenges

Siron^®One enables institutions to keep pace with instant payments, volatile lists, and increasingly sophisticated evasion tactics, all within a single, unified platform. 

A few ways Siron^®One’s solution is head and shoulders above the competition:

• Real-Time Monitoring for Instant Payments: Screen transactions in milliseconds with KYC/AML and risk profile data to make precise, context aware decisions.  

• Comprehensive Coverage: Take a holistic approach by integrating KYC data with all public and commercial sanctions lists, watchlists, PEPs, and adverse media, and internal blacklists and whitelists. 

• AI-Powered Name Matching: Detect name variations and deliberate misspelling and aliases while reducing false positives. 

• Wire Stripping Detection: Discover hidden data and information manipulation in payments and stop evasion attempts.  

• Configurable Rules & Decision Support: Customize screening logic based on risk appetite and streamline case investigations.  

• Scalability: Easily process high-volume and high-speed transactions across SWIFT, SEPA, CIF, SIC, MT/MX and others in real time or batch processing.  

With Siron^®One, compliance teams gain the speed, accuracy, and confidence they need to meet rising regulatory demands, without sacrificing efficiency. 

As sanctions risks grow more complex, regulators expect nothing less than real-time, AI-powered screening.

Download the factsheet to discover how Siron^®One enables smarter, faster, and more precise sanctions screening—trusted by 1,000+ financial institutions worldwide.

Sources:

1. https://foleyhoag.com/news-and-insights/publications/alerts-and-updates/2025/july/lessons-from-the-first-four-ofac-sanctions-enforcement-actions-under-the-second-trump-administration/  
2. https://www.sanctions.io/blog/binances-sanctions-violations-key-takeaways-for-compliance 
3. https://adata.pro/blog/sanctions-penalties-what-happens-if-you-breach-financial-sanctions/  
4. https://home.treasury.gov/news/press-releases/jy2337 
5. https://www.justice.gov/archives/opa/pr/ofac-designated-hezbollah-financier-and-eight-associates-charged-multiple-crimes-arising-out 
6. https://internationaltradetoday.com/article/2025/01/17/miami-real-estate-agent-fined-by-ofac-pleads-guilty-to-russia-sanctions-evasion-2501160051?BC=bc_674e951682924 
7. https://www.ainvest.com/news/kyrgyzstan-2022-crypto-law-enables-russian-sanctions-evasion-stablecoins-2507/ 
8. https://www.theguardian.com/technology/2024/mar/11/crypto-firm-assets-alleged-russian-arms-dealer   
9. https://www.justice.gov/usao-edny/pr/five-russian-nationals-and-two-oil-traders-charged-global-sanctions-evasion-and-money 
10. https://www.bundeswehr.de/en/baltic-sea-russia-s-shadow-fleet-5892544 
11. https://www.fatf-gafi.org/en/publications/Mutualevaluations/Mer-germany-2022.html 
12. https://www.lseg.com/en/risk-intelligence/financial-crime-risk-management/sanctions-screening