As multilateral sanctions against Russia escalate amidst the Ukraine crisis, understanding the distinction between economic sanctions and AML compliance becomes crucial. This brief clarifies the practical differences and similarities, emphasizing the need for compliance professionals to educate stakeholders amidst evolving regulatory expectations.

Unprecedented multilateral sanctions against Russia, the eleventh largest economy in the world, have placed greater attention on sanctions and broader risk compliance efforts, including on anti-money laundering (AML) requirements. Sanctions and AML compliance are distinct, often conflated, and frequently convergent.

This brief unpacks the key practical similarities and differences between US economic sanctions and AML compliance regimes.

How does this relate to the Ukraine crisis?

• Russia’s expanded invasion of Ukraine has increased popular understanding about economic sanctions and also forced many companies to develop or expand their sanctions compliance efforts.
• Sanctions in the United States apply to all US persons (including individuals and legal entities) as well as some non-US persons.
• Covered financial institutions in the United States are required to implement AML controls in addition, and often complementary, to sanctions controls.
• Misunderstandings often arise about the regulatory expectations for sanctions and AML compliance, so compliance professionals frequently must educate internal stakeholders about these different expectations and requirements.

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