Sanctions compliance risk involves prohibited transactions with designated countries, entities, or individuals under programs like OFAC, UN, or EU sanctions. Violations result in substantial fines, criminal prosecution, and business restrictions. BNP Paribas paid $8.9 billion for sanctions violations involving Sudan, Cuba, and Iran. Programs require screening customers and transactions against sanctions lists, training staff, investigating alerts, and filing suspicious activity reports. Complexity arises from overlapping jurisdictions, frequent list updates, and indirect exposure through business partners. Secondary sanctions can penalize non-US entities for certain activities. Technology solutions automate screening but require human judgment for complex ownership structures and name variations.