This Week in Global Compliance — Fraud Typologies Evolve as Sanctions and AML Supervision Tighten
February 20, 2026 — Week of 14–20 February
Executive Summary
The third week of February reflected a dual supervisory focus: tightening AML and sanctions oversight alongside heightened warnings on evolving fraud typologies, particularly those leveraging digital channels and cross-border payment structures.
Regulators in Europe and North America issued communications and enforcement updates underscoring deficiencies in transaction monitoring, customer due diligence, and sanctions controls, while law enforcement agencies highlighted increasingly sophisticated fraud and scam methodologies targeting retail and SME customers.
These developments reinforce a consistent message for compliance leaders: fraud risk, AML control effectiveness, and sanctions governance are converging risk domains requiring integrated oversight and responsive control calibration.
Top Signals
1. Supervisors highlight convergence of fraud and AML risk
Authorities emphasized that emerging scam typologies — including investment and impersonation fraud — are generating transaction patterns that challenge traditional AML monitoring frameworks.
Why it matters:
Institutions must ensure that fraud intelligence and AML transaction monitoring teams operate in a coordinated manner, particularly where scam proceeds flow rapidly across accounts and jurisdictions.
2. Continued scrutiny of sanctions screening and escalation processes
Supervisory engagement reiterated expectations that sanctions alerts are handled with consistent escalation, documented rationale, and timely remediation of control weaknesses.
Why it matters:
Sanctions control gaps are increasingly framed as governance issues, with regulators assessing not only screening technology but also decision-making discipline and oversight structures.
Deep Dives
1. Enforcement — Monitoring effectiveness under review
Recent enforcement updates continued to cite weaknesses in alert backlogs, risk-rating methodologies, and SAR timeliness, particularly where transaction volumes have increased or new products have been introduced.
Practical impact:
- Review integration between fraud detection outputs and AML monitoring scenarios
- Assess capacity planning and alert investigation workflows
- Strengthen governance reporting on monitoring performance indicators
2. Regulation — Integrated approach to fraud, AML, and sanctions risk
Regulatory messaging this week underscored that institutions should treat fraud typologies as part of their broader financial crime risk assessment, particularly where scam proceeds intersect with sanctioned jurisdictions or high-risk counterparties.
Practical impact:
- Update enterprise risk assessments to reflect emerging fraud patterns
- Ensure sanctions screening captures indirect exposure via mule accounts or layered transfers
- Enhance cross-functional coordination between fraud, AML, and sanctions teams
Data Points
- Supervisory communications reiterated that fraud-driven transaction flows must be incorporated into AML monitoring calibration.
- Enforcement outcomes continued to reference transaction monitoring and sanctions escalation deficiencies as recurring themes.
Watchlist
- Further regulatory guidance linking fraud typologies to AML monitoring expectations
- Enforcement referencing coordination failures between fraud and compliance functions
- Continued supervisory scrutiny of sanctions alert handling and governance oversight
- Expansion of cross-border cooperation targeting scam networks and mule account structures
Sources
This briefing consolidates publicly available information from global regulators, supervisory authorities, sanctions bodies, financial intelligence units, and recognised news outlets covering the week of 14–20 February 2026.