The Solicitors Regulations Authority (SRA) and Council for Licensed Conveyancers have issued reminders to be aware of dealing with those on sanctions lists and conveyancers’ responsibilities under the Money Laundering Regulations.
The move comes as the UK imposes further sanctions on Russia and individuals in the wake of the invasion of Ukraine. A new message on the UK Sanctions page of gov.uk reads
“New designations of individuals and Russian entities have been announced. Further sanctions may be imposed in response to events.”
The situation remains fluid with conveyancers advised to be vigilant and review the regularly updated “UK Sanctions List” here: https://www.gov.uk/government/publications/the-uk-sanctions-list
The financial sanctions regime identifies organisations and individuals who pose a risk to the UK. Under the Money Laundering regulations, conveyancers must not act for those on sanctions lists. The firm must also make a report to the Office of Financial Sanctions Implementation (OFSI) if they suspect a customer of their firm is a designated person under the financial sanctions regime.
The CLC has outlined the responsibilities of its regulated community, which mirrors the wider legal community’s obligations:
You have responsibilities under the sanctions regime to safeguard the UK, and to maintain and protect the reputation of the wider legal sector. Failing to follow the financial sanctions requirements could result in criminal prosecution or a large public fine. You should ensure that you have the right processes, systems and controls in place now – and in future – to comply with any sanctions developments to avoid the risks above.
This should include
- Clear Checks: a review of the financial sanctions list before continuing, or undertaking, any transactions for clients. Or offering any advice or services.
- Proper Processes: an update of how (and how often) you access the list. It is also a suitable time to remind yourself and staff on AML obligations. This should include updated training if necessary.
- Flagging Risks: you are reminded that you are also under a legal obligation to report suspicions to the Office of Financial Sanctions Implementation (OFSI) if you believe a client (or a proxy for them) may be a designated person under the financial sanctions’ regime. You should contact OFSI as early as possible, and should ask their advice about whether you also need to notify the FCA and the UK Financial Intelligence Unit (UKFIU), based at the National Crime Agency (NCA).
While the current situation in Ukraine has brought renewed focus to the sanctions regime, conveyancers are also reminded that the regime is global, and is an issues that continues to grow in importance.
“Sanctions, economic crime and AML were already areas of increasing focus, and there will naturally be more of a spotlight on these issues from government, regulators, and the media, along with some consumer groups.”
A spike in cyber crime and fraud is also anticipated and firms should be on high alert. The National Cyber Security Centre (NCSC) is urging UK businesses and organisations to bolster their cyber security resilience in response to malicious cyber incidents in and around Ukraine.
NCSC has issued updated guidance to help organisations to build resilience and stay ahead of potential threats: https://www.ncsc.gov.uk/guidance/actions-to-take-when-the-cyber-threat-is-heightened