Law firms must have the most up-to-date information about the UK sanctions regime.
Sanctions checks have historically been a blind spot for some law firms, perhaps in the (mistaken) view that sanctions compliance is just for large corporate firms.
This was always a risky approach to take. It would be foolish to turn a blind eye under current circumstances.
SRA sanctions information – legal regulator reminds law firms about the importance of sanctions compliance
New financial sanctions are aimed at a wide range of individuals and businesses with links to the Russian state.
In response, the SRA issued an unambiguous formal reminder to solicitors.
Law firms must not act for those subject to sanctions, or deal with their resources. A report must be made to OFSI if a client is suspected of being a sanctions target.
As well as the criminal liability for law firms flouting sanctions, this is also clearly a professional regulation issue. The SRA will no doubt take action where it is necessary.
Note that the regulator expects all regulated law firms to have sanctions systems in place. This is an important part of SRA sanctions compliance:
- Have you performed a sanctions risk assessment?
- Does your firm have a written sanctions policy? It may form part of your wider AML or financial crime policies.
- What is the procedure for checking the sanctions list? Electronic verification systems will usually do the sanctions check in the background. If you manually verify your clients’ identity you should also show that a sanctions check has been performed.
- Have your staff received training on the sanctions regime?
Law Society guidance – UK sanctions regime
All solicitors should ensure they are familiar with the Society’s sanctions guidance. It is a valuable resource, including key information on:
- Criminal offences under the sanctions regime
- Doing a sanctions risk assessment
- Checking clients against sanctions lists
- Sanctions and high-risk jurisdictions
- Acting for a client on the sanctions list
- OFSI reporting
The guidance is supplemented with a practical Q&A, My client is a possible sanctions match. What should I do?
The Society has also recently published new guidance on source of funds, which may be relevant in uncovering SRA sanctions risks.
OFSI guidance – financial sanctions
OFSI has produced a suite of FAQ documents (including specific Russia guidance), useful for solicitors looking for more information.
You should also be aware of other relevant OFSI guidance:
If you have any questions about your SRA sanctions duties, please contact us.
Thanks to Debbie Fowler for her help on this piece.
