Sectoral sanctions are targeted economic measures imposed on specific sectors of a country’s economy, such as energy, finance, defense, or technology, to restrict access to critical resources or markets. Unlike comprehensive sanctions that broadly impact an entire nation, sectoral sanctions are designed to limit the operations of certain industries or companies within that sector, typically to exert political or economic pressure. 

In the context of financial crime compliance, sectoral sanctions require financial institutions to closely monitor and manage transactions involving entities in sanctioned sectors. This involves screening clients and counterparties to ensure compliance with regulatory requirements, such as preventing the financing or support of activities in restricted industries. Sectoral sanctions, often applied to countries like Russia or Iran, are a critical part of global efforts to deter behaviors like aggression, human rights violations, or terrorism while minimising broader economic impacts on civilian populations.