Sanctions Oversight Tightens: House Proposes Mandatory Treasury Reporting

Summary: On June 4, 2025, the House Financial Services Committee reviewed H.R. 3633, the “Banking Transparency for Sanctioned Persons Act of 2025.” This bill would require the Secretary of the Treasury to issue a report identifying any U.S. financial institution that has knowingly provided services to individuals or entities designated under U.S. sanctions programs, particularly those tied to terrorism, weapons proliferation, or foreign corruption. The intent is to strengthen oversight of the financial sector’s role in sanctions compliance and prevent the misuse of the U.S. financial system by sanctioned persons.

Key Takeaways

The bill directs the Treasury to report on U.S. financial institutions knowingly serving sanctioned persons or entities

• Covered sanctions include terrorism, WMD proliferation, human rights abuses, and foreign political corruption
• Reports must include the type of service provided and the institution involved
• Treasury must issue the report within 180 days of the bill’s enactment and update it annually
• Institutions named in the report may be subject to further scrutiny, compliance reviews, and reputational risk
• The bill enhances Congressional oversight of both the Treasury and financial institutions’ sanctions compliance efforts

What this means for your compliance team:

• If enacted, this bill could trigger heightened obligations for due diligence, internal reporting, and monitoring of relationships involving sanctioned individuals.
• Financial institutions—especially those with international exposure—should evaluate current OFAC screening protocols and be prepared to demonstrate proactive sanctions compliance.

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