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24 February 2024

Following the latest news that the UK imposed more than 50 new sanctions targeting Russian individuals and entities, we have a comment from digital compliance specialists SmartSearch.

Martin Cheek, a qualified lawyer and managing director of SmartSearch, said: “The announcement of 50 new sanctions on Russian individuals and businesses by Foreign Secretary David Cameron is a keen reminder to regulated UK firms to check customers against sanctions.

“Now, on the two-year anniversary of the invasion of Ukraine, there are more than 16,000 designations against Russia, which is more than North Korea, Iran and Syria combined. In the UK this week, we also saw six further individual sanctions against Russian prison bosses after the death of opposition leader Alexei Navalny, adding to the 2,000+ individuals and entities already subject to UK sanctions under the Russian regime.

“More than 70% of Russian’s financial systems are now under sanctions, and the reserves from the central bank have been frozen in an unprecedented move against a G20 economy.
“Worrying news for the UK is that only a quarter (25%) of regulated firms are regularly checking new customers against sanctions lists. This figure is dramatically down from 73% the year before, according to our annual survey of 500+ compliance decision-makers across financial services, estate agents, mortgage brokers, intermediaries, accountancy and law firms.

“These new sanctions could swiftly convert seemingly low-risk, longstanding UK clients into high-risk entities overnight. To remain compliant, regulated firms should be conducting Politically Exposed Persons (PEP) and sanctions checks as part of their customer due diligence - or Know Your Customer (KYC) - process. This will identify and verify individuals and business and check them against sanctions and PEP lists, avoiding sanctions breaches.

“Digital compliance makes this process much more straightforward, removing the need for time-consuming and risky manual intervention. Any updates or changes to regulations are immediately reflected in the system, and ongoing monitoring ensures changes to sanctions and PEPs are updated in real-time to ensure your customer database is always compliant.