Asset Management Series: Sanctions – Do We Go Further?

With global events moving fast it is important to reflect on how digital capabilities can help to protect your business and ensure compliance and full alignment with the existing sanctions regime, asset freezes and full FCC measures. The UK is going to push through new economic crime law, I’m sure that other Western economies will implement new economic controls as well. Asset and Wealth managers will need to implement changes and protocols to ensure full compliance with sanctions and legislation which is a rapidly evolving and changing landscape. This post looks at some of the things financial institutions and service providers need to think about.

The FCA states that it is good practice to check your existing clients against the HM Treasury list which is frequently updated as well as all new customers prior to providing services or transactions. It is also recommended that you continue to check for any updates to the HMT list with any changes to a client’s details. Remember, even providing financial advice can be a breach. It is good practice to include directors, beneficial owners of corporate customers and any third-party payees in your checks.

According to the FCA, it is useful to consider the following facts about financial sanctions:

  • Standard anti-money laundering checks do not screen clients against the HM Treasury (HMT) list. Firms should not confuse HMT’s financial sanctions regime with anti-money laundering procedures.
  • Financial sanctions apply to all transactions, there is no minimum financial limit.
  • Politically Exposed Persons (PEPs) are not necessarily financial sanction targets.
  • Most listed individuals and entities are aware that they are on the HMT list, which is publicly available. The issue of ‘tipping off’ (as set out in the Proceeds of Crime Act 2002) should therefore not generally arise.
  • HMT’s financial sanction regime is not the same as our enforcement action. HMT is responsible for implementing, administering, and enforcing compliance with the financial sanctions regime.

The burden on financial services businesses to ensure full compliance with the sanctions protocols across national boundaries has increased by an order of magnitude. It is difficult to imagine how full compliance can be achieved with lists being updated on a daily and sometimes hourly basis. The only way to ensure that your business is fully compliant and aligned to the existing sanctions regime and FCC regulation is through intelligent automation.

For further details contact

David Landi – Head of Asset Management


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Part 1 of a series providing a roadmap on digital transformation and intelligent automation.