🛟 Cross-Border AI Sanctions Compliance - Who Wins When the Rules Change Overnight?

Hello, Abbie Widin here,

AI Check In delivers sharp, globally relevant intelligence on AI governance, financial risk, and capital automation. Already briefing strategy, risk, and compliance leaders at the world’s most influential banks, including JPMorgan, Citi, and Bank of America.

What to expect this edition:

• 🛟 Need to Know: Regulatory Crosshairs on AI-Powered Sanctions Compliance

• 🥷 Deep Dive: How U.S. Banks Are Architecting AI for Cross-Border Sanctions Compliance

• 📈 Trends to Watch: Future of Cross-Border Sanctions AI

• ⚔️ Vendor Spotlight: LexisNexis and Quantifind

Rewrite the rules. Outmaneuver competitors. Stay two steps ahead of regulators.

Let the games begin.

🛟 Need to Know: Regulatory Crosshairs on AI-Powered Sanctions Compliance

Cross-border transactions remain among the highest-risk activities in banking compliance. AI-driven sanctions screening now sits under sharper scrutiny from both domestic and international bodies.

OFAC issued more than 3,000 new sanctions designations in 2024, up nearly 25% year-on-year. Updates arrive multiple times a week, requiring screening engines, including AI models, to ingest and act instantly. Any delay is a governance liability.

In late 2024, the Financial Action Task Force (FATF) updated guidance to bring AI-driven transaction monitoring “in scope” for AML/CTF evaluation, aligning with Recommendation 15 on governing new technologies.

U.S. oversight is increasingly coordinated. Treasury, Federal Reserve, OCC, and FinCEN now share intelligence and technology-risk observations. The Federal Financial Institutions Examination Council (FFIEC) harmonizes examination standards across agencies so model risk, data governance, and auditability are tested consistently, though industry consensus is that governance is still chasing AI’s pace.

Leading practice includes assigning a named executive for sanctions AI (similar to the UK’s SMCR regime), adopting risk-tiered autonomy, embedding Responsible AI committees, shifting to continuous validation, integrating federal and state requirements, and requiring point-of-decision explainability. Boards are also commissioning AI “stress tests” for extreme scenarios such as rapid sanctions expansion, geopolitical shocks, or data poisoning.

🥊 Your Move

1. Move faster than regulators: real-time OFAC ingestion is a competitive weapon.

2. Align controls with FATF and multi-agency oversight before examiners set the bar for you.

3. Stress-test sanctions AI now, so you control the narrative when oversight arrives.

🥷 Deep Dive: How U.S. Banks Are Architecting AI for Cross-Border Sanctions Compliance

Cross-border sanctions compliance is now a strategic control point. For U.S. banks, the challenge is governing AI systems that must detect illicit activity at speed while meeting OFAC, FATF, and multi-agency scrutiny. We look at the top 5 banks with contrasting approaches, each with strengths and limits. Most have been pushed into action.

JPMorgan Chase: Governance at Scale

Score for Cross-Border Sanctions Governance: ★★★★☆ (4.5/5)

JPMorgan’s Global Sanctions Compliance (GSC) Program is an enterprise-wide governance framework, led by a named executive, with documented procedures, independent testing, training, and escalation protocols. Its proprietary generative AI platform reaches more than 200,000 employees, providing multilingual alert triage and document review directly in daily workflows.

Governance maturity is reinforced through human-in-the-loop safeguards, reskilling programs, geopolitical scenario simulations, and red-teaming exercises. External reporting from analogous AML operations shows up to 95% fewer false positives, supported by ongoing performance monitoring.

The combination of scale, integration, and measurable efficiency positions JPMorgan as the current governance benchmark for cross-border sanctions in U.S. banking.

Citigroup – Forced Modernization

Score for Cross-Border Sanctions Governance: ★★★☆☆ (3.5/5)

In mid‑2024, U.S. federal regulators fined Citi $135.6 million for failing to remediate long-standing data‑governance and risk deficiencies flagged in 2020. The FDIC also downgraded its living‑will data quality rating to “deficiency.” These issues hinder high‑velocity sanctions compliance. Citi is now accelerating remediation. Its NextGen AI in trade finance processes 25M+ documents annually, but no public metrics show improved sanctions AI performance. Governance remains strong in trade operations but needs full cross‑border integration.

Citi’s governance approach is robust in its niche but lacks JPMorgan’s breadth and published performance evidence.

Wells Fargo – Governance in Dual Use

Score for Cross-Border Sanctions Governance: ★★★☆☆ (3/5)

Integrates machine learning into treasury and risk operations to flag high-risk counterparties; sanctions screening is combined with Basel III Endgame liquidity planning. Governance appears embedded in treasury AI workflows, but scope and measurable outcomes for sanctions-specific oversight remain limited.

Bank of America – Governance Under Order

Score for Cross-Border Sanctions Governance: ★★☆☆☆ (2.5/5)