Screen a counterparty's trade network against OFAC, EU, UK and UN sanctions lists and identify indirect exposure

A sanctions compliance review maps a counterparty, or a short book of counterparties, against the active sanctions universe and walks the bilateral trade graph outward to surface indirect exposure that first-order screening will miss. The work combines list-based screening, export control classification, and network analysis over BACI bilateral trade at HS6, and closes with an optional vessel-AIS overlay for clients with oil, LNG or refined-products exposure under price-cap and secondary-sanctions regimes.

Problem

The first-order sanctions question is well understood. Is the counterparty itself listed? Is a named beneficial owner listed? Is the destination jurisdiction subject to a comprehensive embargo? Standard KYC tools answer these in minutes. The harder question, and the one that increasingly matters to general counsel and compliance officers, is indirect exposure. A counterparty that screens clean can still ship through an intermediary whose upstream supplier sits on a restricted list, or can procure from a node one or two hops removed from a listed entity. The Entity List, the UFLPA regime, the 50 Percent Rule on beneficial ownership, and the secondary-sanctions posture of the OFAC oil-price-cap regime all make indirect exposure a live risk rather than a theoretical one.

Clients want a posture update: a defensible read on where indirect exposure sits, with the specific corridors, product lines, and intermediaries flagged, and enough narrative context around each flag for general counsel to make a decision rather than guess. The review is the input to that decision, not a replacement for it.

Data

The sanctions universe is assembled from the primary lists in their current form at the date of the engagement. The core set is the OFAC Specially Designated Nationals list and the OFAC Sectoral Sanctions Identifications list, the EU Common Foreign and Security Policy consolidated sanctions list, the UK Office of Financial Sanctions Implementation consolidated list, and the UN Security Council consolidated sanctions list. Export control classification draws on the Bureau of Industry and Security Commerce Control List with full ECCN cross-reference, the Entity List, the Military End-User list, the UFLPA Entity List for forced-labor-tainted supply chains, and the EU Dual-Use Regulation 2021/821 Annex I list which implements the Wassenaar Arrangement controls.

Trade-flow data is CEPII BACI at HS6 bilateral. The bilateral trade graph it produces is the substrate for the indirect-exposure walk. Vessel movements, where relevant, come from the live AIS feed the workbench already ingests, with historical port-call reconstruction from the Barentswatch and Digitraffic feeds and OpenSky cross-reference for cargo flight corridors where flight freight is material. For clients in the oil, LNG and refined-products space, the AIS overlay is what allows the review to speak to oil-price-cap compliance beyond the paper trail.

Method sketch

Screening runs in three layers. The first layer is a deterministic match of the counterparty and its disclosed subsidiaries, beneficial owners, directors, and officers against every list in the sanctions universe, with fuzzy matching tuned to the aliasing conventions each list uses. The output is a flag-per-entity table with the matching list, the record identifier, and the confidence score.

The second layer is an n-hop intermediary walk on the bilateral trade graph. Starting from the counterparty's declared country and HS6 product lines, the walk traces outward to the origin of the upstream inputs (import side) and the ultimate destination of downstream outputs (export side), hop by hop. At each hop, every node and every product line is re-screened against the sanctions universe. Flags are scored by hop distance, product criticality, and trade-value share, so that a one-hop flag on a high-value dual-use line sits visibly above a three-hop flag on a commodity line. The walk terminates at a configurable depth, typically three hops for a standard engagement and up to five hops for a deep supply-chain review.

The third layer is export control classification on the product lines themselves. Each HS6 line the counterparty trades is mapped to its ECCN where a mapping exists, with Entity List and Military End-User checks applied against the destination and against any flagged intermediary. Dual-use classification follows the EU Annex I list and the Wassenaar controls, so the same product can be re-checked against the EU and UK frameworks without rerunning the walk. The output is an HS6-line exposure table with the applicable licensing regime, the jurisdiction-by-jurisdiction classification, and the recommended next step per line.

For clients with material oil or refined-products exposure, the AIS overlay adds a final layer. Vessel port calls are reconstructed for the counterparty's chartered fleet and for vessels declared on bills of lading, then checked against the OFAC price-cap guidance and the Russian oil secondary-sanctions framework. The overlay surfaces ship-to-ship transfers in known dark-fleet corridors, AIS gaps longer than standard operational thresholds, and port calls in cap-breach jurisdictions.

Deliverable

The standard deliverable is a twenty-page compliance memo, a flagged-counterparty list, and an HS6-line exposure table. The memo opens with an executive posture statement in plain language, continues through the three-layer screening results with every flag documented and contextualized, and closes with a recommendations section that groups the flags by next action (clear and document, request additional KYC, decline to proceed, escalate to outside counsel). The flagged-counterparty list is a machine-readable table designed to feed the client's own compliance tooling, and the HS6-line exposure table gives the trade-operations team a line-by-line view of which products need licenses, which need end-user statements, and which are unrestricted under current guidance.

Related workbench pages

Each review is tied back to the open workbench pages that carry the underlying analysis, so the client can verify any flag against the source and re-run the screen at any cadence the compliance function requires.

• Sanctions exposure and restricted-party overlays
• Live vessel AIS and cargo-flight tracking
• Maritime chokepoint and corridor analysis
• Bilateral trade network and n-hop reachability
• Corruption and governance lens on trade corridors
• Political-risk scoring by corridor

Timeline

The standard engagement runs two to four weeks depending on network depth, product-line coverage, and whether the AIS overlay is in scope. A counterparty book with fewer than ten entities and a three-hop walk closes in two weeks. A full supply-chain review at five-hop depth, with AIS overlay and a mid-engagement sanctions-list update, takes four weeks. Annual refresh engagements on an existing review close faster because the walk is incremental against the prior graph rather than run from scratch.