Who Compiles the Financial Sanctions List?


In today's interconnected world, economic and political relationships often extend beyond borders, making maintaining international security and stability crucial. One tool governments and international organisations employ to achieve this goal is the imposition of financial sanctions. These sanctions aim to influence the behaviour of targeted individuals, entities, or countries by restricting their access to the global financial system. But who compiles the financial sanctions list? How does the process work, and what factors contribute to including a particular entity on such a list? This blog delves into the intricate world of financial sanctions, shedding light on the actors involved in the compilation process and the considerations that drive their decisions and answer that important question - who compiles the financial sanctions list?

The Key Players

Compiling financial sanctions lists involves collaboration among various organisations, both at the national and international levels. The primary ones include:

Government Agencies' role in the financial sanctions list:

Department of the Treasury (USA): 

In the United States, the Office of Foreign Assets Control (OFAC), a part of the Department of the Treasury, plays a central role in implementing and enforcing financial sanctions. OFAC administers and enforces economic and trade sanctions based on US foreign policy and national security goals. (https://home.treasury.gov)

European Union: 

The European Union has its own sanctions programs administered by the European External Action Service (EEAS). The European Council adopts these sanctions, targeting specific individuals, entities, or countries in line with EU foreign policy objectives. 

Other Nations: 

Various other countries, such as the United Kingdom, Canada, Australia, and Japan, have their agencies responsible for imposing and managing financial sanctions in alignment with their national interests.

International Organisations' role in the financial sanctions list:

United Nations: 

The UN Security Council can impose sanctions on individuals, groups, or states that threaten international peace and security. UN sanctions are typically binding on all member states, and these sanctions often involve freezing assets, restricting travel, and imposing arms embargoes. (https://www.un.org/securitycouncil/)

International Monetary Fund (IMF) and World Bank: 

These international financial institutions may contribute to sanctions efforts by offering technical assistance, capacity-building, and financial expertise to countries working to implement sanctions effectively. (https://www.imf.org/en/Home)

The Compilation Process

Compiling financial sanctions lists is complex and multifaceted, involving legal frameworks, intelligence gathering, diplomatic efforts, and careful deliberation. Here's a breakdown of the general steps:

1. Identification of Targets:

The initial step involves identifying individuals, entities, or countries threatening international peace, security, or stability. This identification may result from intelligence reports, security assessments, evidence of human rights abuses, support for terrorism, or other actions that violate international norms.

2. Political Considerations:

Political considerations often guide the decision to impose financial sanctions. Governments and international organisations assess the potential impact of sanctions on their foreign policy goals and relations with other nations. Sanctions can pressure a target to change its behaviour, signal disapproval of specific actions, or deter others from similar actions.

3. Legal Framework:

Sanctions must be grounded in a robust legal framework to ensure their legitimacy and effectiveness. This involves drafting legal orders, regulations, or resolutions that outline the specific sanctions measures to be imposed and the legal basis for doing so. Legal experts ensure that the sanctions are consistent with domestic and international laws.

4. Intelligence Gathering:

Accurate and up-to-date information is crucial in identifying targets and justifying the imposition of sanctions. Intelligence agencies gather and analyse data to build a case against the target and demonstrate their involvement in activities that warrant sanctions.

5. Diplomatic Efforts:

In many cases, governments engage in diplomatic efforts to build consensus among their allies and international partners regarding the imposition of sanctions. This collaboration enhances the impact of sanctions by ensuring that they are implemented globally and that loopholes are minimised.

6. Listing and Designation:

Once a target is identified and the legal framework is established, the relevant authority formally lists and designates the target for sanctions. This involves freezing the target's assets, restricting their access to the financial system, and often imposing travel bans.

7. Due Process and Review:

To uphold fairness and prevent errors, most jurisdictions provide mechanisms for targets to challenge their inclusion on sanctions lists. This involves due process and opportunities for review, allowing targets to present their case and provide evidence that they do not deserve to be sanctioned.

Factors Influencing Inclusion

The decision to include an individual, entity, or country on a financial sanctions list is not taken lightly. Several factors influence this decision-making process:

1. Threat to International Security:

Entities that threaten international peace, security, or stability are prime candidates for sanctions. This includes those involved in terrorism, arms proliferation, human rights abuses, and violations of international law.

2. National Interest:

Governments prioritise their national interests when compiling sanctions lists. These interests range from protecting national security to promoting democratic values and human rights.

3. International Pressure:

Global consensus and international pressure play a role in the decision to impose sanctions. Nations often collaborate to address shared challenges and exert collective influence on targets to change their behaviour.

4. Effectiveness:

The potential impact of sanctions on the target's behaviour is a crucial consideration. Policymakers may explore alternative strategies if sanctions are unlikely to change the target's actions.

5. Intelligence and Evidence:

Decisions are based on credible intelligence and evidence linking the target to activities that warrant sanctions. Transparency and accuracy are essential to maintain the legitimacy of sanctions.

Conducting business with sanctioned individuals

Engaging in business with individuals or entities on a sanctions list is generally prohibited and can have severe legal and financial consequences. Sanctions are imposed by governments or international bodies to restrict specific individuals, organisations, or countries from participating in various types of economic activities due to national security, foreign policy, or other concerns.

If you are considering doing business with someone on a sanctions list, you should exercise caution and follow the laws and regulations of your jurisdiction. It's essential to conduct thorough due diligence to ensure you are not inadvertently violating sanctions or embargoes. Ignoring sanctions and engaging in prohibited activities can result in criminal charges, financial penalties, and damage to your reputation.

Suppose you have any doubts or questions about whether a potential business partner or transaction is affected by sanctions. In that case, consulting with legal professionals specialising in international trade law or sanctions compliance is advisable. Always stay informed about the latest sanctions updates and regulations to ensure your business activities remain in full compliance with the law.


Compiling financial sanctions lists is a complex and multifaceted process involving various government agencies, international organisations, legal frameworks, intelligence gathering, and diplomatic efforts. These sanctions are a powerful tool for influencing the behaviour of individuals, entities, and countries that threaten international peace and stability. While the decision to impose sanctions is influenced by political considerations, national interests, and international pressure, the process aims to uphold fairness, due process, and transparency to ensure the legitimacy and effectiveness of these measures. 

Understanding the intricate process of compiling financial sanctions lists as our world continues to evolve becomes increasingly crucial in maintaining global security and stability. Conducting business with organisations or individuals on a sanctions list is generally prohibited and can result in legal consequences. We hope that this blog has allowed you to understand who compiles the financial sanctions list.

Validient’s KYC and AML platform can automatically check for any individuals who are sanctioned and update you in real-time. If you’d like to see this in action, book a demo today! 

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