Why sanctions checks are important
Financial sanctions prohibit an organisation from carrying out transactions with a listed individual or organisation (target). Financial sanctions apply to all transactions; there is no minimum financial limit. Targets may be listed by the United Nations, European Union, US Treasury, or United Kingdom and are updated regularly. Standard anti-money laundering checks do not screen clients against the HM Treasury list. Firms should not confuse HM Treasury’s financial sanctions regime with anti-money laundering procedures.
Financial institutions should have proportionate systems and controls in place to reduce the risk of a breach of UK financial sanctions occurring. Deficiencies in the screening process, or not having a detection system in place, have led to sizeable fines by the Financial Conduct Advisory (FCA).
However, financial sanctions apply to most if not all companies and industries in the UK – even if the organisation is not FCA (Financial Conduct Authority) regulated.
HM Treasury’s financial sanction regime is not the same as FCA’s enforcement action. HM Treasury is responsible for implementing, administering and enforcing compliance with the financial sanctions regime.
Any organisation may be in breach of financial sanctions not only for carrying out a transaction, but also for providing financial advice to a target.
- HM Treasury: Financial Sanctions
- FCA: Financial services firms’ approach to UK financial sanctions
- FCA: Small firms approach to UK financial sanctions
- US Treasury (OFAC): Financial Sanctions
If you would like more information on Sanctions Checker features, or to arrange a demonstration, please feel free to contact our Sanctions Checker Team: