Sanctions And You

An Affordable Solution to theCompliance Requirements

Lee Werrell FInstSMM Chartered MCSI Cert PFS

Sanctions & YouBy CEI Compliance Limited www.ceicompliance.co.uk

CEI Compliance limited www.ceicompliance.co.uk

Sanctions

The LegislationThe Money Laundering Regulations 2007 became law on 15 th December 2007

and explains the measures that a company must employ to detect and prevent

money laundering. The Proceeds of Crime Act 2002 (including the Asset

Recovery Agency) provided specific money laundering offences and

investigative powers, including the seizure of assets.

Sanctions are made against countries, companies and individuals where the UK

government considers that allowing them financial freedom would harm or

endanger others and are typically used by the international community as a

whole.

In the UK (and in UK jurisdictions) The Foreign & Commonwealth Office is responsible

for the overall policy on international sanctions and HM Treasury is responsible for the

implementation and administration. Absolute compliance is demanded. Failure

to comply can result in prison terms of between 2 and 7 years depending on

the seriousness of any breach.

In the financial services world we all know that it is a crime to advise or transact

any business with a listed individual and the 7 year imprisonment term, and / or a

fine, can be imposed if it is established that this has happened.

1“Money Laundering regulations place a general obligation on firms within its

scope to establish adequate and appropriate policies and procedures to prevent

money laundering. Failure to comply with this obligation risks a prison term of up

to two years and / or a fine.”

This means that firms must ensure they have reasonable processes and

1Source = August 2009 Joint Money Laundering Steering Group’s consultation

document on prevention of money laundering / combating terrorist financing

Sanctions & YouBy CEI Compliance Limited www.ceicompliance.co.uk

CEI Compliance limited www.ceicompliance.co.uk

procedures in place to prevent the movement of money, from or for, crime and

terrorism through their firm and even failure to have adequate systems, is

potentially sufficient to bring about a prosecution and potentially result in a 2

year term of imprisonment.

IMPORTANT - While the legislation clearly states that it is unacceptable for firms to

deal with anyone who is present on the Sanctions list, exactly how they should

comply with the requirement is not specified – hence in the development of

SanctionsSearch.com, guidance has been taken from both the Joint Money

Laundering Steering Group (JMLSG) and the Financial Services Authority (FSA).

Both of these organisations state that companies need a system or procedures

in place through which they can actually demonstrate that their clients are not

listed – not only at introduction - but also ONGOING.

The regularly updated Sanctions list is freely available as a CSV document from

HMT's website (www.hm-treasury.gov.uk) and manual checking against this list is

indeed possible. However, since real proof of compliance requires the ability to

show an audit trail that proves clients are absent from the lists on an on-going

basis, manual checks are proving to be at best cumbersome with – and at

worse unreliable.

There are many solutions from an expanding number of companies and all are

charging a variety of fees for the service of sanctions list checking, including the

“fuzzy” matches of misspelt and sound-a-like names used by criminals and

terrorists, but I believe that we have found a true gem. One of the on the market is

£199 annual membership which included 10 search credits and additional credits

could be purchased for £1.00 each minimum of 50 credit bundles. This would

mean that for a company dealing with 300 new clients per annum, ignoring any

initial screen would cost in the region of £500 initial, and then the same amount

every time there was an HMT update.

Looking further into this area we found this excellent value service at a cost akin

to visiting your favourite coffee shack. Starting at only £20 for the first 100 clients

Sanctions & YouBy CEI Compliance Limited www.ceicompliance.co.uk

CEI Compliance limited www.ceicompliance.co.uk

on an initial and on-going basis, with only £10 for each 100 clients after this, it is a

steal.

CEI Compliance recommends that you consider the valuable offer from

Sanctions Search. You can contact them at

Sanctions Search

Professional Office

45 Market Street

Hoylake

Wirral

CH47 2BQ

Telephone 0845 652 67 67

Fax 0151 632 2117

And their website is http://www.SanctionsSearch.com

Details correct at time of printing (Oct 2010)

For help call:Lee Werrell – FInstSMM Chartered MCSI Cert PFS

Managing DirectorCEI Compliance Limited

lw@cei-compliance-limited.co.uk

Web: www.cei-compliance-limted.co.ukwww.skilledpersonsreports.co.ukwww.complianceconsultant.orgwww.ceicompliance.co.ukwww.s166.co.uk