🎧Financial sanctions have become a key element of compliance for banks and payment institutions. In this episode of Alles Legal – Fintech-Recht kompakt, Annerton partner Sebastian Glaab explains why sanctions today go far beyond a simple list screening and how they fit into the evolving European AML framework. – Tune in now!
Financial sanctions have become part of everyday compliance work in the financial sector. Since the sanctions imposed against Russia and the rise of geopolitical tensions, their relevance has increased significantly. In this episode, Dana Wondra speaks with Sebastian Glaab about why sanctions must now be more closely integrated into financial institutions’ risk management systems.
From a legal perspective, sanctions are not new. They have existed for many years in instruments such as the German Foreign Trade and Payments Act and various EU regulations. What has changed, however, is the political momentum behind them and the strict enforcement of violations. Breaches can lead not only to administrative fines but also to criminal liability and significant reputational damage.
In practice, many companies still approach sanctions primarily as a technical list-matching exercise. Yet this approach is no longer sufficient. What matters is a risk-based assessment of the entire business relationship: Who is the contractual partner? Who ultimately owns or controls the entity? And which other parties are involved in the structure?
Complex ownership chains or transactions routed through third countries can create opportunities to circumvent sanctions. As a result, financial institutions must analyse business relationships more comprehensively and systematically assess associated risks.
Sanctions within the evolving European AML framework
Dana Wondra and Sebastian Glaab discuss how financial sanctions are increasingly linked with anti-money laundering rules within the European regulatory framework.
For banks and payment institutions, this means compliance processes must evolve. Instead of isolated checks, institutions need a holistic view of customers, transactions and underlying ownership structures.
Why list screening alone is no longer enough
Traditional compliance processes often rely on screening customers and transactions against sanctions lists. While this remains essential, it is no longer sufficient.
A risk-based approach is required – one that also considers beneficial ownership, complex corporate structures and potential circumvention strategies.
Complex structures as a growing challenge
Sanctions risks often arise in multi-layered ownership structures or cross-border transactions involving third countries.
Financial institutions must therefore increasingly:
- identify beneficial owners accurately
- analyse ownership structures
- assess risks systematically
- integrate sanctions into their overall compliance frameworks
About This Podcast
Alles Legal – Fintech Law in Brief delivers weekly insights into legal and compliance topics in the banking and fintech sectors.
This podcast is a collaboration between Payment & Banking and PayTechLaw.
Each Wednesday, our experts explain current legal developments in a clear and concise way – no legalese, just the context you need. Since 2021, PayTechLaw authors and Annerton lawyers have been bringing legal depth to the mic without losing clarity.
Whether it’s PSD3, DORA or FiDA – we provide the background you need. In 20 minutes. Straight to the point.
