Unilateral sanctions, also known as autonomous sanctions, are restrictive measures imposed by a single country independently, without coordination with international bodies or other nations. These sanctions are used by governments to advance their own foreign policy, national security or human rights objectives by limiting or prohibiting financial transactions, trade, travel or other forms of engagement with targeted individuals, entities or entire jurisdictions.

Within the disciplines of Know Your Customer (KYC) and Anti-Money Laundering (AML), unilateral sanctions play a critical role in customer screening and risk assessment. Financial institutions and regulated entities must ensure they are not conducting business with parties subject to these sanctions, as doing so could result in significant legal, financial and reputational consequences - even if those parties are not listed on multilateral or global sanctions lists.

A well-known example of unilateral sanctions includes those issued by the United States through the Office of Foreign Assets Control (OFAC), where entities on the Specially Designated Nationals (SDN) list are subject to comprehensive restrictions. While these sanctions are binding only within the issuing country’s jurisdiction, they can have global impact due to the dominance of certain currencies and financial systems.

Monitoring for exposure to unilateral sanctions is a key element of a robust compliance program, helping institutions meet regulatory requirements, avoid enforcement actions and protect against financial crime.