Sanctions Framework Review

As firms battle to contend with the ever-increasing demands of effectively following and implementing national and international sanctions orders—often on top of or in conflict with existing workloads—they can see signs of weakness in what may have previously been considered fit-for-purpose systems. These cracks, coupled with an increased demand on resource to manage the output of less than perfect screening protocols, can truly become the thing that keeps MLROs and Compliance Officers awake at night.

Challenges For Firms

At Complyport, we help firms tackle the emerging issues of insufficient policies and procedures, and levels and quality of customer data that prevent firms from adequately screening or discounting potential matches against the sanctions lists In such urgent situations, people often think that they don’t have time to examine their systems and try to correct any failures. However, an investment of time now could be majorly impactful to increasing efficiency and productivity.

The Regulator’s Perspective

Firms also need to be prepared for where the FCA’s attention may turn once matters start to return to normal. Whenever an increase or unprecedented level of sanctions are applied (and especially right after a pandemic), the regulator is likely going to be focusing heavily on the following areas post-event:

  • Testing the Operational Resilience within firms
  • Undertaking thematic, supervision, or desktop regulatory reviews to ascertain if
    • A firm’s sanctions systems and controls were sufficient to allow the identification of whether an exposure existed and was controlled
    • A firm had an exposure and didn’t control it, or
    • A firm could not tell if it had an exposure at all.

In addition, the EU Sanctions Whistleblowing tool has been released and the USA’s Kleptocapture taskforce is being deployed to seek out, investigate, and prosecute non-compliance with sanctions orders. Has there ever been a better time to undertake a sanctions framework health check?

How We Can Help

Complyport can conduct an audit of your firm’s sanctions framework, reviewing your systems and controls to ensure they are understood, fit for purpose, and relevant to your business. To organise a free consultative meeting, get in touch with our Financial Crime and Forensics team today. Please fill in the form below to book a free consultation with a member of our team.