Firms warned on sanctions compliance

A breach of UK sanctions is a criminal offence, punishable by a fine or imprisonment.

The Solicitors Regulation Authority (SRA) announced this week it has written to all the firms concerned, offering guidance on compliance, along with a template for firms to use.

Juliet Oliver, SRA deputy chief executive, said: ‘Strengthening the financial sanctions regime is an important part of the government’s response to war in Europe, and law firms have a key role to play.

‘The sanctions regime applies to all firms that provide legal services, not just those that are captured by the anti-money laundering regulations. Firms we have written to responded to our survey last year by saying they did not have or were not aware of a written-down firm-wide risk assessment, or the process for identifying an ultimate beneficial owner.’

Last week, the UK, US and Australia imposed co-ordinated sanctions against key figures involved in financing Hamas and Palestinian Islamic Jihad (PIJ). This is the third round of sanctions by the UK against Hamas and PIJ since the 7 October attacks. Previous rounds sanctioned other top-ranking officials and financiers of Hamas.

The Foreign Office said the asset freezes and travel bans target five individuals, including financier Zuheir Shamlakh, who is believed to have used his money exchange and cryptocurrencies to move large amounts of Iranian funding to Hamas ahead of the 7 October attacks, using legitimate businesses as a front.

According to a report published last week by market intelligence specialists Diligent, ‘Compliance trends 2024’, 21,784 new sanctions were imposed in 2023 (a 50% increase), making third party due diligence a top priority for compliance professionals.

Josh Black, editor-in-chief at Diligent, said: ‘With sanctions changing rapidly, it is increasingly important for companies to have robust and transparent compliance processes in place.’