Since January 2017, the volume of global sanctions has risen by over 270 percent, which has far-reaching consequences for compliance teams, organisations and even society as a whole. A new Refinitiv white paper quantifies the latest inflation data collated by our Global Sanctions Index (GSI) and reveals insights into a changing sanctions landscape.
- The latest edition of the GSI white paper quantifies the current levels of sanctions inflation and the key drivers behind this inflation.
- The Russia-Ukraine war has been a key driver of sanctions inflations and autonomous sanctions programmes in a range of countries.
- The GSI unpacks the established trend in which the total number of explicit sanctions across the globe has increased significantly over time.
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The GSI – measuring sanctions hyperinflation
The second edition of this white paper from Refinitiv delivers some key insights into global sanctions inflation.
Based on the latest data* from Refinitiv’s GSI, our paper quantifies current levels of sanctions inflation and the key drivers behind this inflation, while also identifying a shift in the volumes of consensus-driven versus autonomous sanctions issued across the globe.
Launched in April 2022, the GSI is an innovative tool that unpacks the global phenomenon of sanctions hyperinflation – an established trend in which the total number of explicit sanctions across the globe has increased significantly over time.
Unpacking three key trends
Our latest data, including that collected by our sub-indices, points to three key global sanctions trends:
Sanctions inflation is persistently continuing
In April 2022, the GSI was 253, but by August it had risen to 273, equating to year-on-year inflation of 14.6 percent (up from 11.2 percent in April). According to the white paper, this is considered “deep hyperinflation”.
In terms of actual numbers of sanctioned individuals and entities, nearly 4,000 persons were added to global sanctions lists over this period, bringing the total number of sanctioned individuals and entities to nearly 52,000.
The Russia-Ukraine war is driving autonomous sanctions programmes
The war has been a key driver of sanctions inflation at substantially elevated levels in a range of countries. Notably, sanctions inflation stands at 49.6 percent for the European Union, 80.1 percent for Japan, 131 percent for Australian autonomous sanctions and 55 percent for the United Kingdom.
Consensus-based sanctions are declining
In contrast to this almost unprecedented growth in the levels of autonomous sanctions, consensus-based sanctions, such as those issued by the United Nations (UN), are experiencing sanctions deflation.
UN sanctions now account for just 2 percent of global explicit sanctions. The total number of sanctions imposed by the body has remained flat over the last five years.
One possible explanation for this significant trend is that UN sanctions are subject to veto by its five permanent members. A growing lack of consensus relating to geo-political developments across the globe has seen the UN sanctions mechanism stall.
Managing sanctions compliance
Our paper highlights that current levels of sanctions inflation, as well as those seen over the last few years, are substantial. Moreover, sanctions compliance has become inherently more complex.
As a result of these two factors, rising volume and increased complexity, the cost of sanctions compliance is accelerating at pace. It is therefore crucial that organisations invest in well-designed screening programmes, powered by leading technology and trusted data, in order to remain compliant with sanctions-related regulations and navigate a dynamic landscape.
About the GSI: The Global Sanctions Inflation (GSI) Index takes its base as January 2017 (=100) and includes every explicit sanction regime tracked by Refinitiv World-Check Risk Intelligence data, covering all keywords with the ‘sanctions’ keyword type. This means that implicit sanctions, for example, sanctions created by the OFAC 50 percent rule, are entirely excluded from this analysis. The sanctions regimes tracked are very broad. The consequences or severity of the sanctions are not considered.
* Latest data to August 2022, index base 100 as of January 2017