SRA Contacts 1,000 Firms on Sanctions Compliance – Five Recommendations on How to Comply

The Solicitors Regulation Authority (SRA) wrote to over 1,000 law firms providing guidance on complying with the UK’s financial sanctions regime in February 2024. Two months on, a reminder of some of the key takeaways and recommendations:

  • The SRA advises measures to mitigate strict liability sanctions breach risks.
  • The SRA states the letters are advisory and currently not linked to an enforcement crackdown
  • However, SRA warns sanctions checks can help mitigate the strict liability risk of breaching the sanctions regime.

Five Key Recommendations:

  1. In the letters, the SRA included guidance on completing firm-wide sanctions risk assessments and information on client identification and screening using the Office of Financial Sanctions Implementation’s (OFSI) online tool.
  2. The SRA emphasises that conducting sanctions checks can help mitigate the strict liability risk of breaching the sanctions regime. Breaching financial sanctions is a criminal offence that can result in fines or imprisonment.
  3. Firms who received the SRA letter are advised to carefully assess their exposure to sanctions risks based on their specific practice areas and client bases. Implementing sanction screening procedures may be prudent for some firms but is not a one-size-fits-all necessity at this stage.
  4. The SRA cautions that individuals looking to evade sanctions might specifically target solicitors lacking experience in navigating such matters.
  5. Intricate corporate ownership structures and intermediaries could be employed to conceal connections to designated individuals/entities. This further emphasises the importance of having robust sanctions checks in place.

The regulator’s guidance provides a framework for firms to evaluate their risks and determine an appropriate and proportionate compliance approach aligned with their risk appetites.

 

Juliet Oliver, SRA Deputy Chief Executive said:

“Strengthening the financial sanctions regime is an important part of the government’s response to war in Europe, and law firms have a key role to play. The sanctions regime applies to all firms that provide legal services, not just those that are captured by the anti-money laundering regulations.”

Firms can consider mitigating risks by seeking/outsourcing KYC/AML advice/functions  through Financial Crime experts and consultants and leveraging technology solutions

How Complyport Can help

At Complyport, we offer a complete range of financial crime and sanctions screening services from automation to outsourcing, we have you covered. Our solutions cover the entire lifecycle from KYC/B onboarding, sanctions screening, to ongoing monitoring and enhanced due diligence.

Our experienced team can assist with ongoing maintenance/refresh reviews, and remediation efforts as part of your company’s KYC compliance and sanctions program.

Benefits:

  • Reduce sanctions risks by automated daily screening against sanction lists
  • Outsourcing repetitive and not profitable manual processes, allowing you to focus on higher-value activities
  • Reduce the time, costs and resources to onboard customers thus improving the KYC/B client experience
  • Flexibility to adjust the size of the team to match your needs as you grow and evolve
  • Outsource labor-intensive processes such as reviewing potential sanction matches, clearing false positives, and collecting documents.

The outsourcing of KYC/B and sanctions screening is a cost-effective and efficient way of managing  Compliance. Complyport will help you control your KYC operations and meet your specific and at times onerous regulatory obligations.  Contact Sukh Vairea at: sukh.vairea@complyport.co.uk to book a free consultation.

About Complyport

Complyport is a market-leading consulting firm supporting the UK financial services industry for over 22 years. We specialise in providing Governance, Risk and Compliance services to support the regulated financial services industry to raise standards and thrive.

Complyport can assist with the preparation of a GAP analysis and impact assessment on the investment firm’s capital adequacy and risk management framework of the Company under the regulatory framework.

We specialise in supporting the UK financial services industry with compliance guidance, advice and best practice.

  • Financial Crime Risk and Compliance support
  • Compliance managed services and resourcing compliance personnel
  • Operational resilience & Cybersecurity advice
  • Skilled Person Reviews and Regulatory Investigation
  • Prudential support, IFPR, ICARA and financial resilience advice
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  • Comprehensive compliance work-flow management software

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