UAB Magazine Issue October 2026

89 Study Union of Arab Banks - October - 2026 Trade finance and cross-border payments under greater scrutiny Trade finance presents particular challenges because a single transaction may involve an exporter, an importer, a shipping company, an intermediary, and several banks. These parties may operate in different countries, use different currencies, and have complex ownership structures. Sanctions evasion schemes can exploit these arrangements. Companies may conceal beneficial owners, misrepresent the origin or destination of goods, or use intermediaries to hide links to restricted parties. In some cases, shipping records and commercial invoices may not accurately reflect the underlying transaction. ForArab banks, this makes it important to look beyond the payment instruction. A transaction should be assessed in the context of the customer's normal business, the nature of the goods, the countries involved, and the identities of the parties receiving the funds. Technology can help. Modern screening and monitoring systems can identify potential matches against sanctions lists, flag unusual payment patterns, and help compliance teams focus on higher-risk cases. However, technology is not a complete solution. Systems may generate false alerts, while sophisticated schemes may escape automated detection. Therefore, human judgement remains essential. Compliance teams need the authority and expertise to investigate suspicious transactions, seek additional documentation, and escalate concerns when necessary. At the same time, controls should not create unnecessary obstacles for legitimate customers. Excessive delays can damage commercial relationships and undermine confidence in the banking system. The aim is to distinguish genuinely problematic activity from lawful transactions that simply require additional scrutiny. What Arab banks should do now Sanctions compliance should be treated as a responsibility shared by the board, senior management, business units, and compliance professionals. It cannot be left entirely to a department that reviews transactions after commercial decisions have already been made. The U.S. Treasury’s Office of Foreign Assets Control (OFAC) identifies five