Last week, financial crime and sanctions leaders gathered for a thought-provoking roundtable dinner at the historic Royal Regiment of Fusiliers’ Regimental Headquarters and Officers’ Mess, nestled in the iconic Tower of London.
The evening opened with a fascinating account of the Regiment’s storied military history, including its involvement in conflicts with countries that are now subject to modern sanctions regimes. The setting served as a powerful reminder of the long arc of geopolitical conflict and its continued relevance in today’s sanctions environment.
Framed by this rich historical backdrop, we discussed the Past, Present and Future of the ever-evolving sanctions landscape, examining where we’ve been, where we are now, and what lies ahead.
The Past, Present and Future of Sanctions
- Past: We reviewed major shifts in sanctions policy over recent years, from the Russia-Ukraine conflict to recent lifting of sanctions on Syria, and how these have transformed the risk landscape for businesses globally.
- Present: We discussed the operational challenges of sanctions compliance, including fragmented regimes, rising regulatory expectations, and the day-to-day complexities of monitoring, screening and responding, particularly when working with third-party vendors.
- Future: Finally, we explored emerging threats, political volatility and evolving enforcement trends, and how firms can stay agile.
Roundtable Discussion on Sanctions Compliance
The discussion was a candid exchange of insights on testing approaches, managing vendor relationships, and the evolving role of technology in sanctions compliance. Key highlights included:
- FCA Sanctions Modular Assessment Proactive Programme (SMAPP) and Sanction Screening Tool (SST)
Firms shared experiences of the testing process and datasets, highlighting the breadth of test data that may not align with some customer bases and jurisdictional exposure. The aim of the test is to examine the appropriateness of the firm's screening tool configuration and fuzzy logic. A key takeaway: ensure you understand your screening configuration, its effectiveness and the rationale for its set up.
- Vendor Contracting Best Practices
Participants shared practical tips on how to manage sanctions screening vendors, such as:
- Careful review and negotiation of the contract.
- Demanding full audit trails, including how quickly lists are updated.
- Challenging vendors that cannot provide transparency or explain model performance.
- How to Test Sanctions Systems Effectively
Each attendee was testing their systems in different ways. The outcome was that a strong test needs to be conducted with a large enough dataset to provide assurance but adjusted and scaled to the actual risk profile of the business. A key takeaway: firms with only UK-based clients may not need overly complex scenarios but should still ensure meaningful coverage.
- AI and Reducing False Positives
While there is growing interest in using artificial intelligence (AI) to reduce alert fatigue, few around the table were actively using it yet. Key concerns included:
- Explainability of AI decisions.
- Understanding how vendors test and validate their AI models.
- Balancing innovation with regulatory expectations for transparency.
- Communication and Cooperation Can Benefit All
The event brought together sanctions and financial crime professionals from a number of firms and industries, and it was evident that being able to discuss sanctions frameworks and compare approaches was beneficial to all. A key takeaway: There is an opportunity to drive and improve sanctions frameworks through discussion and sharing of best practices.
Final Word
The evening combined historical perspective with practical peer insight, offering a rare opportunity to reflect, share, and strategise in one of London’s most iconic venues. As sanctions continue to reshape global business, conversations like these are critical to staying both compliant and prepared.
And if you'd like to read more about the sanctions landscape, my colleague Eva Koreskova has unpacked the latest FATF reports, with insights and news on sanctions evasion, terrorist financing, North Korea, Russia and more. Read her blog article here.
Meet the Expert
Jessica Cath, Partner
Jess is a financial crime specialist who works with firms across the industry to build, scale and strengthen all aspects of their financial crime frameworks. She has advised start-ups through growth phases and supported Tier 1 banks in transforming controls, including in response to regulatory scrutiny or enforcement. Her experience includes multiple US monitorship and global Section 166 Skilled Person reviews. She also holds a Master’s in Intelligence and International Security and an ICA Diploma in Financial Crime Prevention.