An embargo is a government-imposed ban or restriction on trade, financial transactions, or other economic activities with a specific country or group of countries. Embargoes are typically used as a political tool to exert pressure on nations for actions such as human rights abuses, aggression, or involvement in illicit activities like terrorism. They may target specific goods, services, or sectors, such as arms, oil, or technology. 

In the financial crime compliance space, embargoes play a significant role in ensuring that financial institutions and businesses do not engage in prohibited trade or financial relationships with embargoed countries. Compliance teams must monitor and prevent any transactions that violate embargoes, as engaging in such activities can lead to severe legal consequences, including fines and reputational damage. Identifying and enforcing embargo-related restrictions is a critical part of an organisation’s efforts to avoid becoming complicit in financial crimes or political violations.