The SRA has sent a mandatory questionnaire on compliance with the UK sanctions regime to all firms who were not covered in last year’s survey of those within the regulated sector for AML purposes.
Speakers in a recent SRA webinar indicated that the SRA expect all firms to have a written risk assessment and to check the Office of Financial Sanctions Implementation sanctions list on every new instruction and at a number of key points during the retainer, for example on exchange of contracts. We fully appreciate that unlike AML compliance, the sanctions regime does not involve a risk-based approach.
However, it may only take a moment for a regulator to issue such an edict, but for firms which do not deploy continuous electronic monitoring systems, undertaking an online check in cases which self-evidently will not be subject to sanctions is not good use of time and may impede other compliance tasks.
If the SRA’s approach is right – and it is inconsistent with the Law Society’s guidance – it would be necessary to undertake a sanctions check on any new instruction from, for example, HM the King, any government department including HM Treasury – and even the SRA itself. For those who act for prominent firms in the law and accountancy, which may have hundreds of partners or members and where it would be headline news if sanctions were imposed, it is also quite unrealistic, particularly given the need to identify beneficial owners.
Finally, when searching, note the poor data integrity in the sanctions list, for example listing some entries under ‘United Kingdom’ and others under ‘UK’.
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