FCA Reminds Firms of their Financial Sanctions Obligations in the Light of New UK Measures Against Russia
On 24 February 2022, coinciding with Russia’s invasion of Ukraine, the FCA updated its webpage, reminding firms of their obligations in relation to financial sanctions regimes.
This followed a new tranche of sanctions announced by the UK against Russia on 22 February, and further measures announced on 24 February which are available on the Foreign, Commonwealth and Development Office webpage.
- FCA-regulated firms have an obligation to implement and maintain systems and controls to counter the risk that they might be used to further financial crime and this includes compliance with financial sanctions obligations.
- The FCA has the power to impose restrictions and/or take enforcement action where it identifies failings in these controls.
- The Office of Financial Sanctions Implementation (OFSI) also has the power to levy civil (monetary) penalties for breaches of financial sanctions and, in extreme cases, will work with law enforcement to pursue criminal prosecution.
- Firms should screen their customers/clients against the UK Sanctions List to meet these new sanctions measures and screen against the OFSI list of asset freeze targets for financial sanctions obligations.
- We also recommend investment managers also reach out to their administrators to seek confirmation that they have taken appropriate steps to implement the new measures.
- Any knowledge or reasonable suspicion of breaches of financial sanctions must be reported to OFSI at the earliest opportunity, and firms must also directly notify the FCA.
- The FCA also refers firms to their expectations in relation to compliance with financial sanctions as set out in FCG 7 of its Financial Crime Guide. This includes examples of good and poor practice in relation to firms’ governance, risks assessment and approaches to screening in relation to financial sanctions.
If you have any questions about the FCA’s guidance, please reach out to your ACA consultant or contact us below.