How AI can help navigate the new landscape of sanctions

By Luke Taylor, Subject Matter Expert at Luminance
Luke Taylor, Subject Matter Expert at Luminance on AI, risk and liability in the new landscape of sanctions

As sanctions continue to be imposed on Russia in the wake of the invasion of Ukraine, non-Russian organisations must quickly and comprehensively assess their level of exposure to sanctioned entities and ensure they abide by the growing number of restrictions. For many organisations deeply involved in cross-border business, the challenge now is to assemble and analyse their contracts across their company and supply chains.

The scale of this challenge is obvious, as is the pressure from stakeholder groups on organisations to provide a comprehensive assessment of their liabilities. To remain compliant and avoid reputational damage, large-scale contract reviews are underway to identify any ties to newly sanctioned individuals, banks and companies. 

The economic and moral implications of sanction non-compliance are high, and artificial intelligence has an important role to play in helping businesses manage their risk.

The Benefits of AI in Assessing Risk and Liability

So, what does this mean in practice? Let’s imagine that a shipping company located in the UK needs to review and understand its contractual landscape so it can assess the extent of its business operations in Russia and its ties to any sanctioned entities. Historically, manual contract review was the only way of doing this, resulting in countless inefficiencies. But, using AI, this company can thoroughly and rapidly interrogate its contracts. 

Firstly, AI would provide a global and holistic overview of the company’s business activities by identifying all geographies present within contracts, allowing the reviewer to instantly focus on documents of relevance. AI would display all business operations in Russia, not only surfacing documents in the Russian language but also any reference to Russian places or legal structures within English or other language documents. The unique language and jurisdiction agnosticism, achieved by the AI reading patterns within language, would allow the company to easily gauge its operations and exposure to sanctioned entities. Importantly, the company could be proactive and use technology to define its own geographical risk parameters to include documents relating to other nations that may be jeopardised by conflict. 

Secondly, AI would help organisations understand their documents in a more intelligent way. At present, many companies rely on manual searching to find answers within their documents. Yet this can involve a vast amount of time and expense and put organisations at risk of missing something. By contrast, AI can understand concepts within documents in much the same way that a human brain does, forming links between ideas. So, if this company were searching for mentions of ‘Russia’ within their documents, for example, AI could recognise that words such as ‘Russian Federation’ or ‘Moscow’ would likely also be relevant to the search, and thus should be included. 

Finally, AI would not only help the company gain these critical insights from its existing documents but could also anticipate future changes in standards or regulations by adapting as social mores or laws shift. Advanced AI can learn simply by being shown an example of how a concept should look. For example, should further sanctions be imposed in the future perhaps on other nations deemed to be assisting Russia, AI need only be shown one instance of compliant (or non-compliant) clause drafting and then can instantly flag every other document containing this clause, as well as any instances of non-compliance in all subsequent incoming documents.

We Need AI to Keep Up with the Pace of Change 

We have seen enormous upheaval over the past few years in terms of regulation, law, policy shifts and unexpected events, from data privacy becoming a major issue to increased financial regulation in the wake of recessions and trading scandals, to COVID-19, Brexit, ESG and sanctions. In such an unpredictable world, modern companies, particularly those operating across borders, face vast challenges. Technology, and specifically AI, can help with contractual understanding and commercial questions, freeing businesses up to deal with the other implications these changes carry. 

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