The importance of sanctions software for large industrial companies and manufacturers

Key takeaways

1. Sanctions compliance is critical for manufacturers: Industrial companies face significant risks and penalties if they fail to comply with increasingly strict global sanctions regulations.
2. Legacy compliance systems are inadequate: Outdated, manual processes are error-prone and unable to keep up with frequently changing sanctions lists, increasing the risk of violations.
3. AI-driven software solves major challenges: Modern AI solutions automate screening, reduce false positives, stay up to date, and provide necessary audit trails.
4. Non-compliance has severe consequences: Companies risk massive fines, legal action, and reputational damage if they violate sanctions.
5. Automated compliance is now a business imperative: Proactive use of advanced software protects operations, builds trust, and can be a competitive advantage.

Strong sanctions software is vital to keep the industrial machine running 

The global economy has never been more heavily regulated or connected than it is today. As such, large manufacturing companies face a minefield of compliance challenges. Whether operating across borders, engaging with international suppliers, or fulfilling government contracts, the risks of violating sanctions regulations are high and the penalties can be even higher. 

While most associate sanctions compliance with financial services, the reality is that industrial companies are equally vulnerable to sanctions violations. And with regulators like the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), the UK’s Office of Financial Sanctions Implementation (OFSI), and the EU’s restrictive measures stepping up enforcement efforts, manufacturers can no longer afford reactive or manual compliance practices. 

This is where sanctions screening software becomes indispensable. 

What are sanctions and why do they matter? 

Sanctions are regulatory tools imposed by governments or international bodies to restrict trade and financial interactions with targeted entities. Sanctions are often placed in response to geopolitical tensions, human rights violations, or national security concerns. These restrictions can apply to: 

• Countries and regions (e.g., North Korea, Iran, Crimea) 

• Individuals (e.g., known terrorists or drug traffickers) 

• Entities (e.g., front companies or state-owned enterprises) 

• Sectors (e.g., defense, oil & gas, dual-use technologies) 

The fascinating and scariest aspect of sanctions is that violating these rules, even inadvertently, can result in severe consequences, including: 

• Multi-million-dollar fines 

• Loss of export privileges 

• Damage to brand reputation 

• Criminal charges for company executives 

For manufacturers dealing with complex global supply chains, thousands of vendors, and cross-border transactions, the risks are especially pronounced. Things get even worse when those you are dealing with might not even explicitly be named in a sanctions list.  

They may be merely sanctioned by association (e.g., due to being employed by a sanctioned company or half the company is owned by a sanctioned individual or entity), which would again leave your business liable to prosecution. 

Why sanctions screening and compliance is now a boardroom issue 

Manufacturing companies historically treated sanctions compliance as a legal or procurement problem. But recent enforcement actions and the evolution of global regulations make it clear that sanctions risk should be a concern for all enterprise companies. 

Consider the following potential scenarios: 

• A US energy company unknowingly procures steel components from a blacklisted Russian supplier. 

• A German manufacturer ships industrial equipment to a distributor in a sanctioned region, having been misled by shell companies and falsified documentation. 

• An aerospace firm sources electronic parts that pass through third-party suppliers tied to embargoed entities. 

You might think that because there was no intent to act against the sanctions in place, regulators would allow an organization to merely apologize. Unfortunately, that is not the case. 

In each of the above situations, ignorance would be no defense. Regulatory agencies expect companies to implement strong Know Your Customer (KYC) and Customer Due Diligence (CDD) protocols to detect and prevent these violations proactively. Thankfully, much of this work isn’t manual and can now be automated. But what is your company currently using? 

The shortcomings of legacy sanctions compliance processes 

Many manufacturers still rely on fragmented, manual approaches to sanctions screening. With technology having advanced a lot since this software was released, they probably need updating. Why? Because these systems are most likely: 

• Inconsistent: Screening might happen at procurement, but not at logistics or finance. 

• Static: Sanctions lists change daily, but updates may only occur monthly or quarterly. 

• Manual: Human compliance officers spend hours matching names and flagging false positives. 

• Slow: Investigations delay shipments, contracts, and payments, hurting operations. 

These inefficiencies not only increase the risk of missing high-risk entities but also waste valuable time and resources. 

How AI-led sanctions software solves the problem 

AI-led sanctions screening solutions offer a powerful, scalable way to modernize compliance. Here’s how: 

1. Real-time screening at scale

AI systems can process and screen millions of records in real time, from vendors and customers to shipments and invoices. This allows manufacturers to maintain full visibility across procurement, logistics, and finance without slowing down operations. 

2. Advanced entity resolution

False positives are a major pain point in traditional sanctions checks, as they slow down teams in uncovering genuine threats. AI models use natural language processing (NLP), machine learning, and fuzzy matching to distinguish between similarly named entities (e.g., John Smith vs. John Smyth) and identify potential red flags more accurately. 

This reduces false positives by up to 70%, freeing compliance teams to focus on actual risks, boosting their productivity. 

3. Automated list updates

Sanctions screening platforms are integrated with global watchlists such as: 

• OFAC SDN List 

• UN Consolidated List 

• EU Sanctions Map 

• BIS Entity List 

• The UK Sanctions List 

There are more than 350 watchlists in 60+ languages, so keeping on top of everything manually is a huge task and practically impossible. 

Advanced sanctions screening systems automatically sync with changes, ensuring that screenings are always conducted against the latest data. 

Moreover, it is important to note that just because someone is on a list, it doesn’t necessarily mean they have done anything wrong. For example, politicians and their families often feature as politically exposed persons (PEPs) because there is more chance of corruption. 

4. Customizable risk scoring

Every company has unique risk tolerances. Sanctions screening software allows businesses to configure rules and customer risk ratings based on factors like geographic exposure, product sensitivity, or ownership structures.  

This helps prioritize threats that matter most to the company’s specific compliance profile. 

5. Auditability and reporting

Sanctions software provides full audit trails, documentation, and suspicious activity reports (SARs), which are essential for internal governance and external regulatory inquiries. When audits happen, manufacturers need to show that they performed due diligence, how they did it, and when it occurred. 

Use case example: Sanctions software in the manufacturing supply chain risk 

Let’s consider a large global construction company sourcing equipment and materials from vendors in Asia, Europe, and the Middle East. It needs to ensure none of its suppliers – or their suppliers within the chain – are subject to sanctions.  

Alongside this, the company needs to screen customer payments and logistics providers. If that feels like a huge task, that’s because it is. But sanctions screening software can help by: 

• Automatically screening vendors and sub-vendors against all applicable lists 

• Flagging entities with known ties to sanctioned regimes 

• Tracking changes in ultimate beneficial ownership (UBO) or risk profiles over time 

• Triggering alerts before a purchase order is placed or a shipment is released 

This proactive approach prevents costly mistakes and gives procurement teams the confidence to move fast without cutting corners. 

The cost of non-compliance goes beyond monetary fines 

For manufacturing companies, non-compliance isn’t just a financial problem but a legal one as well. But since the balance sheet is a key part of boardroom discussions, let’s start with numbers. Here are some examples of fines in recent years: 

Consider these examples: 

• $1.19 billion: Penalty paid by a telecoms equipment manufacturer for shipping items that originated in the US to Iran and North Korea, in violation of US export controls and sanctions programs. 

• $965 million: Telecoms and industrial company fined for corruption and sanctions-related breaches involving Uzbekistan (with sanctioned persons/entities). 

• $635 million: Tobacco manufacturer fined for illegally selling tobacco products to North Korea, violating US sanctions. 

• $5 million: Danish firms fined for breaking an EU embargo by selling jet fuel to Russian companies that was eventually used in fighter planes in Syria. 

• $4.25 million: US chip manufacturer fined for unauthorized exports to China. 

Many of the largest fines are currently implemented by the US, but other countries are getting tougher. In July 2025, the UK government announced plans to improve its enforcement processes for financial sanctions. 

In many cases though, the damage to productivity, reputation, and long-term trust far exceeds the monetary fine. For those in charge, jail terms can also be imposed, while in the worst cases, countries can ban companies from operating within their borders, which can have huge ramifications for the bottom line. 

As the consequences can be horrific, investors, partners, and customers expect industrial firms to take compliance seriously. 

The future of manufacturing is autonomous compliance 

With growing geopolitical tensions, evolving regulations, and increasingly complex supply chains, sanctions compliance can no longer be an afterthought for manufacturing companies. It’s a strategic imperative. 

By investing in AI-led sanctions screening tools, large manufacturing companies can protect their global operations, avoid costly fines and disruptions, build trust with regulators, partners, and customers. In this sense, organizations can turn sanctions compliance into a competitive advantage.  

SymphonyAI provides dynamic sanctions screening software for industrial companies and manufacturers 

At SymphonyAI, we provide a unified platform that combines financial crime prevention, sanctions screening, and entity resolution, powered by AI and built for the modern enterprise company. Whether you’re investigating vendors or shipping across countries, our software helps you stay compliant, agile, and audit-ready. 

SymphonyAI’s sanctions screening solutions improve detection accuracy, accelerate investigations, enhances the customer experience, and allows for scalable compliance, which can easily be configured to suit your needs.  

With 350+ watchlists (in 60+ languages), 2000+ rules, a 98% accuracy rate in identifying true positives, and 70% decrease in false positives, it provides effective sanctions screening for businesses of all sizes.  

By prioritizing the highest risk alerts and using intelligent name matching and AI-driven data analytics that process in real-time, SymphonyAI’s dynamic sanctions screening software maximizes investigator efficiency alongside improved detection accuracy.  

Want to know more? Visit the sanctions screening page.  

Discover SensaAI for Sanctions  

SymphonyAI also offers SensaAI for Sanctions. Augment your existing detection solutions to dramatically enhance matching capabilities with gen AI and predictive AI that analyzes and structures previously unstructured text and significantly reduces false positives.  

The result is a real-time AI upgrade for screening with a seamless, streamlined process.  

Learn more about SensaAI for Sanctions.  

Alternatively, get in touch to schedule a meeting and see how AI-led sanctions screening can transform your compliance operations. 

Related resources

Guide to SensaAI for Sanctions Screening

Navigating AML and Sanctions in North America

Sanctions in focus – how new AI tech is adding business value

Sanctions exposure in non-financial industries