Financial sanctions compliance—examples of good (and poor) practice

The following Risk & Compliance practice note provides comprehensive and up to date legal information covering:

  • Financial sanctions compliance—examples of good (and poor) practice
  • Governance and senior management responsibility
  • Risk assessment
  • Screening
  • Screening during customer on-boarding
  • Ongoing screening
  • Matches and escalation
  • Policies and procedures
  • Staff training and awareness

Financial sanctions compliance—examples of good (and poor) practice

The Financial Conduct Authority (FCA) has provided some examples of good practice for sanctions systems and controls in Part 7 in its guide, FCG Financial Crime Guide: A firm’s guide to countering financial crime risks (FCG) and in its Financial Crime Thematic Reviews (FCTR) Part 8 Financial services firms’ approach to UK financial sanctions.

The information contained in this Practice Note is taken from these sources. Financial sanctions compliance—checklist identifies specific Precedents you could use or adapt to help you demonstrate good practice in financial sanctions compliance.

Governance and senior management responsibility

Good practicePoor practice
Delegating responsibility to an individual of sufficient authority for overseeing the organisation’s adherence to the sanctions regime.
Making it clear at what stage customers are screened in different situations, eg when customers are passed from agents or other companies in the group.
There is appropriate escalation of actual target matches, potential matches which cannot easily be verified and breaches of sanctions. Notifications are timely.
Senior management is involved in approving and taking responsibility for policies and procedures.
Senior management is sufficiently aware of the organisation’s obligations regarding financial sanctions to enable it to discharge its functions effectively.
Adequate and appropriate resources are allocated by senior management.
Believing payments to sanctioned individuals and entities are permitted when the sums are small.
No internal audit resource is allocated

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