What is a Sanction Check? UK Sanction Checks short guide to employers
Do you and your employees know your responsibilities and requirements concerning sanctions checking? Are you aware of when you must check individuals and who you need to report breaches to?
Keep reading to learn more about what a sanction in the UK is, what are sanction checks, and how to approach them as an employer/organisation in the UK.
What is a Sanction?
A sanction is a measure of prevention, usually implemented by governments and international organisations with the intention to deal with people who are listed under sanctions lists, known as “designated people”.
Financial Sanctions Orders ban firms from performing transactions with an individual or organisation, known to be a target. In some cases, the Order will restrain organisations from providing any financial services to the target, making it a criminal offence to provide financial services to anyone on the list. In that case, making funds available to a designated individual could make you liable for up to seven years in prison or subject to a significant fine.
What is a Sanction List?
A sanctions list is a collection of individual sanctions that can apply to individuals, countries, groups or companies. Sanction lists are frequently sorted by governments or international bodies, such as the EU.
Criminal activity that may be cause for ending up on sanction lists includes (but is not limited to) the following:
- Terrorist activity and financing terrorists
- The construction and/or financing of weapons and arms
- Human rights violations
- Money Laundering
What is a Sanction Check?
Sanctions checks are specialized screenings that involve several Government sanction databases that identify and list individuals who are prohibited from certain activities or industries.
These types of checks allow you to Know Your Customer (KYC) in the fight to prevent money laundering, terrorist financing and financial crime.
Who are Politically Exposed Persons (PEPs)?
Politically exposed persons (PEPs) are people with a specific position in public life that might make them vulnerable to corruption. The definition extends to immediate family members and known close associates or confidants.
For more information visit our “AML PEPs & Sanction checks” page.
What are the requirements for UK employers concerning sanctions checking?
It is important for any business to Know Your Customer (KYC) in the fight to prevent money laundering, terrorist financing and financial crime.
The Office of Financial Sanctions Implementation (OFSI) periodically make a list available that states the people who are subject to a financial sanction in the UK. The best way to approach this would be by ensuring that all companies check this list at ‘every’ update, not matter what the transaction type is.
As an organisation, you should keep record of the details of all sanction checks performed on every client on their file, and your employees/staff should be informed of who they should report in case of a match or breach being spotted.
Being found guilty of breaching sanctions can have serious consequences in the UK.
It is a criminal offence in the UK to provide financial services to any individual on a sanctions list. Allowing access to funds to “designated people” (individuals on a sanction list) could make you subject for a penalty of up to 7 years in prison or liable to an important fine. Some financial institutions have been subject to multi-million-pound fines (e.g. The RBS got a fine of £5.6 million because they failed to have appropriate systems and controls to prevent breaches of UK financial sanctions).
Do you have to conduct sanctions checks manually in the UK? About Complygate’s AML and PEPs Sanction Checks.
Sanction checks can be conducted using the checking services of a specialised provider. At Complygate we recognise the risks and complexities businesses face every day.
With Complygate's instant online checks, which screens against 300+ global and domestic databases in real time, you can organise your Politically Exposed Persons (PEPs) and Sanctions compliance in a stress-free way.
Our PEPs and Sanction checks will increase efficiency, protect your business against the threat of non-compliance and mitigate the risk of any penalty or prosecution.
Our Politically Exposed Person & Sanction checks Search against database including:
- Politically Exposed People (PEPs)
- Financial regulator
- England & Wales Charities Commission
- Current & Previous Sanction
- Law enforcement
- Adverse Media
- Companies House
- Disqualifies director
- Corporate registry
- Global ID verification
Not sure what to do next?
You can learn more about sanction checking on our designated page. Selecting the best solution for your organisation takes time and is a decision that must be done cautiously. We understand that, therefore we offer free demos of our services, so you can get the opportunity to get more in-depth information and ask any questions directly to our team. No need to say that this is compromise-free and with the sole purpose of providing you with knowledge to make informed decisions.