Financial sanctions prohibit an organisation from carrying out transactions with a listed individual or organisation (target). Financial sanctions apply to all transactions; there is no minimum financial limit. Targets may be listed by the United Nations, European Union, US Treasury, or United Kingdom and are updated regularly. Standard anti-money laundering checks do not screen clients against the HM Treasury list. Firms should not confuse HM Treasury's financial sanctions regime with anti-money laundering procedures.
Financial institutions should have proportionate systems and controls in place to reduce the risk of a breach of UK financial sanctions occurring. Deficiencies in the screening process, or not having a detection system in place, have led to sizeable fines by the Financial Conduct Advisory (FCA).
However, financial sanctions apply to most if not all companies and industries in the UK - even if the organisation is not FCA (Financial Conduct Authority) regulated.
- HM Treasury's financial sanction regime is not the same as FCA's enforcement action. HM Treasury is responsible for implementing, administering and enforcing compliance with the financial sanctions regime.
- Any organisation may be in breach of financial sanctions for not only carrying out a transaction, but also for providing financial advice to a target.