Firms should also refer to the Consultative Committee of Accountancy Bodies (CCAB) published joint statement. The statement addresses member firms professional and AML obligations considering the recent developments in Ukraine.
Frequently Asked Questions
How do I access the sanctions lists to identify which of my clients might have sanctions in place?
There are several sources of information for checking sanctions listings. The most direct route for your firm could be to search the OFSI list. This is always current and will reflect sanctions changes immediately. You can search this list free of charge by accessing the link below:
The list will include all individuals and entities that have UK and UN sanctions in place at any point in time.
If you use electronic verification systems then these will also check your client for sanctions but be aware that there might be a delay between an entity and individual being sanctioned and your provider updating their list.
You could use the ICAEW client screening service. Again, there could be a slight delay in sanctions changes and the list being updated.
What should I be doing to ensure I am not trading with clients who have been added to a sanctions list?
Review your client base, consider all entities that may have links to Russia. Remember that Russian oligarchs have been able to purchase visas and may have citizenship elsewhere, for example Malta, Cyprus or even the United Kingdom, who operated a golden visa system until quite recently.
Recheck those clients that you think could have links to Russia individuals, companies, or banks.
How can I ensure I am up to date on changes to sanctions?
We recommend you subscribe to OFSI updates. You will be notified immediately of any changes to the regime
What about clients linked to Russia but are not currently sanctioned?
There is guidance on ethical considerations and AML obligations in the latest CCAB guidance:
Remember that the situation is fluid. The regime is under constant change. The client will need ongoing monitoring.
If the entity has no current sanctions in place, also consider your ethical obligations to act with integrity, objectivity, with professional competence and due care, confidentiality and with professional behaviour. Are you comfortable with this client, are there potential reputational risks? Do they have links to sanctioned that you may not be aware of?
What happens if I find a client is subject to sanctions?
If you find a client of yours is subject to sanctions you risk committing a criminal offence by continuing the business relationship. You should consider whether a report is required to OFSI and you should strongly consider whether it remains appropriate for you to act for that client.
If you determine that a report to OFSI is required, you will need to:
- provide OFSI with any information you hold about the designated person or entity by which they can be identified;
- inform OFSI of the nature, amount, quantity of any funds or economic resources held on behalf of the customer or client, at the time this knowledge or suspicion arose.
You must inform OFSI as soon as practicable if you know or reasonably suspect a client is a designated person or whether a client has committed offences under financial sanctions regulations (where that information is received while carrying on its business).
Reports of frozen funds and economic resources, information regarding a designated person, and notifications of credits to frozen accounts should be emailed to: email@example.com.
Reports regarding suspected breaches should be submitted to OFSI using the form on GOV.UK:
Your obligation to report to OFSI is in addition to any other sanctions reporting obligations you may have. These could include submitting Suspicious Activity Reports (SARs) to the National Crime Agency (NCA) under the Proceeds of Crime Act 2002.
In March 2022 the UKFIU introduced a new SARs glossary code for entities associated to sanctioned individuals and companies on the sanctions list. Use the code XXSNEXX where you suspect the activity is consistent with money laundering and is linked to entities sanctioned by the UK, US, EU and other overseas jurisdictions as a result of the Russian invasion of Ukraine.
Are there circumstances where my firm or a client can be released from sanctions obligations?
Where a transaction involves a person or organisation who is subject to financial sanctions (whether directly or indirectly), you must obtain a licence to allow the activity to take place without breaching financial sanctions. OFSI can only issue licences on specific legal grounds.
What else should I be thinking about in terms of the changes in sanctions?
Consider your supplier network. Ensure that you have no suppliers that may be linked to entities/individuals with sanctions against them.
Consider whether the changes impact on your firm’s overall risks of facilitating money laundering. Does your firm wide risk assessment need updating to consider the changes?
The National Cyber Security Centre (NCSC) is urging UK businesses and organisations to bolster their cyber security resilience in response to malicious cyber incidents in and around Ukraine.
Amid the escalating war in Ukraine, legislators and have sounded the alarm about Russia using cryptocurrencies to evade sanctions. Firms should be alert to this risk
Where can I get guidance on sanctions?
The Office of Financial Sanctions (OFSI) provide guidance for relevant firms on financial sanctions:
The UK may impose the following types of sanctions measures:
- trade sanctions, including arms embargoes and other trade restrictions
- financial sanctions, including asset freezes
- immigration sanctions, known as travel bans
- aircraft and shipping sanctions, including de-registering or controlling the movement of aircraft and ships
To find out more visit:
The Foreign, Commonwealth and Development Office (FCDO) have recently recorded a Webinar: UK Sanctions relating to Russia: Briefing by UK Government. A recording of the event has now been published on gov.uk and can be accessed via this link.
This was recorded on 17 March 2022 and provides context to the Russian sanctions regime, summarises all the sanctions in place, explains licensing grounds, specific and general licenses, and the impact of breaching sanctions.
There are further resources here:
- Guidance to implement and comply with Russia Sanctions
- OFSI e-alerts
- Notices to exporters
- Notices to importers
- Monetary penalties for breaches of financial sanctions: guidance - GOV.UK (www.gov.uk)