The Challenge of Identifying Sanctioned Entities
After VinciWorks polled 146 compliance, legal, and financial services professionals about sanctions screening, the results were eye-opening: 90% lack full confidence they'd catch a sanctioned individual hiding behind complex ownership structures. Even more concerning, 60% of organizations haven't recently tested whether their escalation process would work when needed.
These findings coincided with questions from compliance managers: "We screen names fine, but how do we train people to see through the corporate structures?" The real challenge isn't running a sanctions list check. It's recognizing when a legitimate-looking buyer is controlled by someone designated, or when goods will reach a sanctioned end user through layered jurisdictions.
Here's what compliance teams are asking to close that gap.
Training to Identify Obscured Beneficial Ownership
Sanctions compliance is investigative work, not just database matching. Your team needs to ask, "Who really controls this entity?" and "Who benefits from this transaction?"
Focus training on ownership red flags: nominee directors with no operational role, companies in secrecy jurisdictions with minimal disclosure, frequent changes in corporate structure around designation dates, and circular ownership that obscures the actual controller.
The VinciWorks poll found that 55% of respondents identified establishing ownership and control as their greatest challenge. Concentrate your training hours here. Use real corporate registry documents (anonymized if needed) to trace ownership chains. Show your team what a shell company registration looks like compared to a legitimate subsidiary structure.
A practical framework: train staff to escalate any transaction where they can't identify a natural person who owns or controls more than 25% of the entity. If the ownership trail goes cold or circles back, that's your signal.
Beyond Direct Matches: Recognizing Indirect Exposure
This is where enforcement actions are landing. When Binance pleaded guilty in 2023 and paid over $4.3bn in penalties, the violations included indirect exposure through inadequate anti-money laundering and sanctions controls. In June 2026, OFSI fined Sabre Global Technologies over £1m for providing services to a designated Russian airline, including routing a payment through an account outside the UK.
Both cases involved transactions that wouldn't trigger a simple name match. Your screening system might say "no match" while your organization is facilitating sanctioned activity.
Train your team to recognize indirect exposure patterns: services provided to a non-designated entity owned or controlled by a designated person, goods shipped to a legitimate distributor that forwards them to a sanctioned end user, payments structured to avoid direct transfers to designated accounts.
Add a second layer of review. After your automated screening clears a transaction, someone with judgment and training should ask: "Even though this counterparty isn't on the list, could this transaction ultimately benefit someone who is?"
Testing Your Sanctions Escalation Process
Having a documented process isn't enough if it hasn't been tested recently. The VinciWorks poll found that only 40% of organizations described their process as both clear and regularly tested. Seven percent admitted their approach depends on one or two individuals rather than documented procedures.
Testing means running a tabletop exercise where you inject a potential sanctions match into your workflow. Does the right person get notified? Do they know what authority they have to stop the transaction? Is there a clear decision tree, or does everything wait for the chief compliance officer to return from vacation?
Time your exercise. Sanctions compliance is often a race against the clock. A payment that processes before you can stop it is a breach, even if you identified the issue eventually.
Test your escalation process at least twice a year. Rotate scenarios to cover different transaction types and parts of your business. If your process only works when your most experienced compliance analyst is available, you don't have a process; you have a key person risk.
Keeping Sanctions Training Current
The VinciWorks poll found that 58% include sanctions training as part of an ongoing program. The other 42% either trained staff once as a standalone session, haven't introduced training, have no plans to, or don't know if staff have been trained.
Sanctions regimes change constantly. Russia-related designations expanded dramatically after 2022. China-related restrictions have evolved rapidly. If your team completed sanctions training two years ago, they're working with outdated threat models.
Build sanctions into your quarterly compliance update, not just annual training. When a major designation happens that affects your industry, brief your relevant teams within a week. A five-minute huddle explaining why a newly designated entity matters to your business is more effective than a 45-minute e-learning module six months later.
For roles handling international transactions regularly, consider monthly case reviews. Take a recent enforcement action (OFSI publishes detailed penalty notices) and walk through what the company missed and how your team would handle the same scenario.
Understanding Sanctions Exposure Beyond Geography
Sanctions exposure isn't about where you operate; it's about where your transactions ultimately flow. Goods can pass through several jurisdictions before reaching a sanctioned end user. A European distributor might look clean while forwarding products to a designated entity in another region.
Train your team to map transaction chains, not just immediate counterparties. If you're selling components, ask what the buyer manufactures and where those finished goods go. If you're providing services, understand the full scope of your client's operations.
The principle is that you can't outsource sanctions compliance to geography. Even if your company has no offices in high-risk jurisdictions, your customers' customers might be exactly the entities you're prohibited from doing business with.
Taking Action
If your team is in that 90% who lack full confidence in spotting sanctioned individuals behind complex structures, you're not alone, but you can't stay there. Start by testing your escalation process this quarter. Run a tabletop exercise with a realistic scenario and see where your documented procedures break down in practice.
Then look at your training cadence. If sanctions appear once a year in a general compliance course, it's not getting the focus your risk profile demands. Build ongoing scenarios around beneficial ownership, indirect exposure, and supply chain tracing.
The enforcement actions are telling you where regulators are looking. Listen to them.
