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UK companies backsliding on sanctions screening

UK companies backsliding on sanctions screening

UK companies are failing to keep up with the requirements for sanction-screening prospective clients despite the high level of global geopolitical unrest, according to a recently published survey.

The data reported by UK-based regtech SmartSearch found that just 25% of surveyed companies always check new customers against lists of sanctioned or politically exposed persons (PEPs).

This is a sharp decline from the previous year which showed that 73% of companies had followed strict screening rules.

The figure is all the more alarming, states SafeSearch, given the recent geopolitical tensions between the US and China as well as the fallout from the Russia-Ukraine conflict which saw a number of Russian oligarchs placed on sanctions lists for the first time.

According to SmartSearch, a failure to address the poor level of compliance could see a number of UK businesses become high-risk entities overnight.

More worrying is the fact the financial services sector has been one of the worst offenders with compliance slipping from 66% to 22% in the space of the last 12 months.

“The backslide in this year’s data underlines a worrying theme of complacency on compliance,” said Martin Cheek, managing director of SmartSearch.

“Sanctions are not a static list, they are a dynamic and rapidly evolving tool of foreign policy. Firms that think occasional checks are sufficient are not just naïve, they’re risking severe penalties, including substantial fines.

The survey interviewed 500 “compliance decision-makers” across financial services firms and intermediaries such as mortgage brokers, law firms, accountants and estate agents.

Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 24 November, 2023, 10:27Be the first to give this comment the thumbs up 0 likes


As in they asked companies "Are you backsliding on sanctions screening?" and 75% of the surveyed companies said "Yes"?

There are many ways of finding out whether companies comply with sanctions screening requirements but I never thought survey could be one of them.