The Solicitors Regulations Authority (SRA) and Financial Conduct Authority (FCA) have issued reminders to be aware of dealing with those on sanctions lists and practitioners’ 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 practitioners 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, solicitors 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.
All SRA-regulated firms must have appropriate policies in place to ensure they comply with sanctions legislation, including undertaking regular and appropriate checks of sanctions lists.
Firms should check the financial sanctions lists before offering services or undertaking transactions for clients. If an individual is on the sanctions list and subject to an asset freeze, firms may not deal with those funds or make resources available to that person.
The SRA reminded law firms that they have responsibilities under this regime to safeguard the UK and protect the reputation of the legal services industry. Breaching the financial sanctions requirements can result in criminal prosecution or a fine.
The FCA has also published helpful guidance on the sanctions regime.
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
There are some exemptions for which firms can seek a licence from the Office of Financial Sanctions Implementation (OFSI). These include reasonable fees for the provision of legal advice. OFSI will judge whether the fees are reasonable. Guidance on these is available online.