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Sanctions inflation: Unpacking the full impact

Michael Meadon
Michael Meadon
Sales Director, Customer & Third-Party Risk Solutions – Asia Pacific, Refinitiv

Refinitiv’s latest white paper drills down into the critical area of sanctions inflation, explaining what it is and how it impacts compliance teams, before outlining some best practice considerations for institutions.

  1. As with the Russian invasion of Ukraine, states use sanctions as the primary tool to deter, punish or condemn certain actions by other countries or persons beyond the reach of their law enforcement authorities.
  2. Sanctions inflation costs are high – both to society and to institutions directly. Refinitiv’s new Global Sanctions Index (GSI) explains.
  3. As the number and complexity of sanctions regimes have proliferated, the importance of having a formal design mindset to screening has become even more important.

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Global sanctions inflation

Sanctions have become a key consideration in international relations. Moreover, they are more numerous, diverse and complex than ever before. Despite this, there has been no systematic quantitative measurement of how sanctions grow over time – until now.

Refinitiv has developed an innovative index to track sanctions inflation across the globe – the Global Sanctions Index (GSI).

Key metrics revealed by the GSI include:

  • Annual sanctions inflation stands at 10.7 percent as of April 2022.
  • Over 47,000 individuals and entities are now sanctioned globally.
  • Since January 2017, the number of sanctioned persons has increased by 255 percent.

Download the white paper: Understanding sanctions with the Global Sanctions Index (GSI)

Turning to the current sanctions on Russia, the paper highlights that, although the volume of sanctions update activity was significant – there were over 15,000 updates in March and over 9,000 in April 2022 alone – the total number of de-duplicated sanctions over the period grew at a modest pace.

While this may seem counter-intuitive, the explanation is that a unique person might be sanctioned multiple times, quite possibly at different times by different sanctioning bodies.

For example, a person may be sanctioned by the United States on one day, by the EU the following week, and by Japan and Australia the week after.

On a de-duplicated basis, a scenario such as this still only adds a single additional sanctioned person to the total, despite the fact that the waves of sanctioning activity will trigger repeated work and alerts for compliance teams.

Who is sanctioned and by whom has an additional impact.

Sanctions imposed over the invasion of Ukraine have targeted Russia’s wealthiest and most powerful people, the Central Bank, large banks and more. Given the size of the Russian economy, and its centrality to commodity exports in particular, these sanctions have an enormous impact.

The key takeaway here is that the volume of new sanctions does not have to be at unprecedented levels for the consequences to be significant.

Moreover, static data alone does not adequately reflect the many practical challenges that stem from sanctions inflation. For example, a sanctioning body will typically announce multiple, even dozens of names for each additional sanctioned individual.

Why sanctions inflation matters

Sanctions inflation carries some significant consequences for the compliance profession in particular, but the knock-on effects impact the entire organisation, and even society as a whole.

Some notable risks and consequences include:


The risk of non-compliance with sanctions regulations tops the list, particularly given that regulatory scrutiny is intensifying and that the consequences of non-compliance, including but not limited to reputational damage and financial penalties, can be significant.

Additional complexity

Sanctions regimes are becoming more complex, often because different rules apply in different jurisdictions. This impacts the resources needed to remain compliant, often leading to a need for additional staff, in-house or external counsel and sanctions experts.

Higher costs

Each additional name added to a sanctions list drives up the cost of screening and, by extension, the cost of compliance. More staff are needed, with implications for training, IT and HR resources, as well as licences from vendors, office space and other resources.

Lower efficiency

Match rates are often dominated by false positives, which can typically only be identified after human review. Increased sanctions volume leads to increased false-positive rates, which lower efficiency levels.

Negative customer experiences

The fallout from false positives can also impact the customer experience, a global topic that remains high on boardroom agendas. For example, a legitimate, non-sanctioned customer could have transactions blocked and be subjected to additional scrutiny while the compliance team checks their sanctions status.

Wider societal impact

The many risks associated with sanctions compliance can lead institutions to avoid certain types of business entirely, with potential economic consequences. This could even extend to financial exclusion.

Sanctions are our highest priority and receive dedicated 24/7/365 attention

The Refinitiv Global Sanctions Index

The GSI has specifically been designed to help our customers navigate the sanctions landscape with greater confidence.

Key features of the index include:

  • The GSI is based on de-duplicated World-Check risk intelligence data covering the net increase in explicit sanctions and includes every known, publicly available sanctions list across the globe.
  • The GSI covers all keywords with the ‘sanctions’ keyword type
  • Implicit sanctions (like those created by the OFAC 50 percent rule) are excluded from the analysis
  • Both natural and legal persons are included.
  • Equal weight is applied to all countries and sanctions programmes.
  • The index has a base date of January 2017.
  • The consequences or severity of the sanctions are not considered

The GSI fills a critical gap for compliance professionals, delivering usable sanctions data and insights to help teams stay ahead of the regulatory curve.

Our paper concludes that sanctions inflation has been significant over the last five years, with the number of sanctions more than doubling.

Far more than sheer numbers, however, is the fact that sanctions are becoming ever-more complex. This means that investing in a well-designed screening programme with good matching and reliable data is no longer a nice-to-have. It is now essential.

Refinitiv’s proprietary World-Check Risk Intelligence database has a 22-year history of quantifying and tracking sanctions lists, leaving us well placed to deliver reliable data to our customers across the globe.

Understanding sanctions with the Global Sanctions Index (GSI)


What is the latest in regards to sanctions imposed on Russia?

According to Refinitiv’s latest white paper highlights that, although the volume of sanctions update activity was significant – there were over 15,000 updates in March and over 9,000 in April 2022 alone.