What you need to know about UK Sanctions

What are UK sanctions, and why do they matter to your firm?

Sanctions are restrictive measures that can be put in place to fulfil a range of purposes. According to GOV.UK, these include complying with UN and other international obligations, supporting foreign policy and national security objectives, as well as maintaining international peace and security, and preventing terrorism.

The UK implements a range of sanctions regimes through regulations made under the Sanctions and Anti-Money Laundering Act 2018 (the Sanctions Act). The Sanctions Act provides the main legal basis for the UK to impose, update and lift sanctions.

Types of sanctions include:

• trade sanctions, including arms embargoes and other trade restrictions
• financial sanctions, including asset freezes
• immigration sanctions, known as travel bans
• aircraft and shipping sanctions, including de-registering or controlling the movement of aircraft and ships.

What does this mean for my firm’s customer diligence measures?

Firms must comply with any restrictions implemented under the UK sanctions regime. Therefore, it’s vital firms include sanctions checks on their clients and their clients’ beneficial owners as part of their onboarding and ongoing customer due diligence procedures.

In some cases, an exception may exist or, for certain activities, a licence may be issued. Please refer to the guidance issued by the Foreign, Commonwealth & Development Office (FCDO) for more information around exceptions and licences. Where firms are unclear as to whether an exception exists or licence can be issued, they should seek independent legal advice.

How do I know if a client is subject to a sanction?

There are two sanctions list firms can use as part of their customer due diligence measures.

The UK’s sanctions list is published by the FCDO and contains all individuals, entities and ships specified/designated under the Sanctions Act. The list includes all those designated under the types of sanctions including financial, immigration, trade and transport. Sanctions regularly change so firms should use the most up-to-date list available online.

The Office of Financial Sanctions Implementation (OFSI), which is part of HM Treasury, also issues a list of all those subject to financial sanctions imposed by the UK – known as the consolidated list. Find the financial sanctions search here.

Both sanctions lists are included in AAT’s AML checklists and templates. AAT monitors how firms are complying with their obligations during our practice assurance review monitoring activities.

What do I do if my client is subject to a sanction?

If you find out that a person or organisation you’re dealing with is subject to a sanction, you must immediately stop dealing with them and consider whether you need to disengage them from your services.

If the person or organisation is subject to a financial sanction, you must also:

• freeze any assets you’re holding for them
• inform OFSI as soon as possible.

How can I keep up-to-date about the UK sanctions regime?

AAT publishes updates and risk alerts in the Anti-money laundering and ethics Knowledge Hub, which is accessible to members.

Firms can also subscribe to FCDO’s e-alerts.

AAT’s AML helpline

AAT’s AML helpline offers advice for AAT-supervised firms on all aspects of complying with the Money Laundering Regulations, such as advice on how to report suspected illegal activity. To discuss any questions you might have, call us on +44 (0)20 7367 1347 or email [email protected].

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