As one of the world’s largest economies and business hubs, the UK plays an important role in the global fight against money laundering and terrorism financing. Accordingly, the UK imposes financial sanctions against a variety of foreign targets that are engaged in those types of criminal activities.
What Is the HM Treasury Sanctions List?
The HM Treasury Sanctions List contains the names (and other identifying information) of individuals and entities currently subject to UK sanctions. Those sanctions take the form of asset freezes and market access restrictions – measures in line with UK AML/CFT policy and designed to curb criminal behavior from regimes around the world. The Treasury list incorporates the sanction targets of international organizations, including the United Nations and the EU.
The Office of Financial Sanctions Implementation (OFSI) is responsible for enforcing the HM Treasury Sanctions List. Money laundering and the financing of terrorism are the main criminal threats that the list is designed to address but it also combats international weapons proliferation, narcotics trafficking, treaty violations and human rights violations.
Who Has to Comply with HM Treasury Sanctions?
All financial institutions in the UK are forbidden from doing business with entities on the Treasury list – at the risk of criminal penalty. In more detail, sanctions regulations apply to:
- Banks, financial institutions, NGOs, or similar obligated entities operating in the UK, or established under UK law.
- British citizens and citizens of British overseas territories, or persons protected by Britain.
- Any individual in the UK or subject to UK law.
Serious UK sanctions violations are punishable by fines of £1 million or 50% of the breach (whichever is greater) and specific criminal charges against management personnel. Firms should ensure HM Treasury sanctions lists are included in their AML/CFT program to remain compliant: when new customers or clients are onboarded, a Treasury sanctions list search will verify whether or not sanctions are in place against them.
Why Is It Important to Have a Sanctions Screening Tool?
International sanctions lists change constantly so it can be challenging for financial institutions to keep up with the latest additions. Automated sanctions screening tools allow financial institutions to achieve ongoing compliance and avoid penalties: integrated as part of a risk-based AML/CFT program, a sanctions screening tool can be used to check the relevant lists quickly, and identify sanctioned customers immediately.