By Collette Allen, Client Services Director, SmartSearch.
Firms should take action to review their due diligence and sanctions screening procedures to avoid falling foul of extensive new and emerging sanctions against Russia. The wide-ranging sanctions imposed so far by Western nations include restrictions against individuals, entities and their subsidiaries, and the introduction of legislation to limit deposits held by Russian nationals in UK bank accounts to £50,000.
It will be essential for organisations to ensure that any individuals and organisations they are dealing with have not become subject to newly imposed sanctions. These sanctions are extensive, and have implications for a wide range of businesses in the UK. Not only are corporates of all kinds banned from making funds or other economic sources available to sanction targets, but they are also precluded from dealing with intermediary financial institutions through which funds could pass.
In order to avoid breaching sanctions, businesses should be undertaking fresh due diligence and screening to ensure that they are not transacting with individuals or organisations that are subject to the new sanctions. Any regulated companies found to have contravened the sanctions brought in by the government against Russia could face action, including hefty fines, from regulatory organisations such as Office of Financial Sanctions Implementation (OFSI).
The newly introduced sanctions mean that it is not enough for organisations to have successfully screened a client at an earlier date. Businesses need to ensure they are using electronic verification so they can screen clients to see if they are on sanctions or politically exposed persons (PEP) lists.
In order to do this effectively, they need to ensure that the electronic verification platform they are using includes a monitoring system. The SmartSearch platform, for example, provides alerts if any person or entity already on the system is among those targeted by the new sanctions.
SmartSearch’s anti-money laundering verification platform conducts individual and business searches, both for the UK and international markets with automatic worldwide sanction and PEP screening. SmartSearch users are able to verify individuals and companies globally in a single platform via a browser or API, with full Sanction, PEP and adverse media screening, and then ongoing monitoring.
We are offering this unrivalled user experience today to over 5,000 client firms and 50,000 users, enabling them to comply with the latest AML regulations and fulfil their AML, Customer Due Diligence (CDD), and Know Your Customer (KYC) compliance obligations.
With no requirement for clients to provide identity documents, SmartSearch’s automated verification approach is significantly more convenient for both users and their end customers, with individual AML checks taking two seconds from start to finish, while business checks take less than three minutes.
The Russia sanctions mean it is clearly no longer enough for businesses to undertake client onboarding using old-fashioned methods that cannot ensure adequate screening against sanctions and PEP lists. This approach is also unable to constantly monitor for status changes following the introduction of new sanctions, and without alerts businesses are unable to immediately cease transactions linked to the flagged entity.