Counter-terrorist finance and compliance with the financial sanctions list

Counter-terrorist finance legislation in the UK aims to ensure that funds do not reach terror organisations and regimes. Sanctions against certain regimes and persons are imposed as part of this aim, and compliance with these financial restrictions is highly important for all businesses offering relevant legal or financial services.

Such sanctions are imposed domestically by the UK government, and further sanctions may be inherited from the European Union and the United Nations. The Treasury provides a list of designated persons and entities that are subject to such restrictions on its website.

It is a criminal offence to handle the funds of the organisations and people on this list, or to allow funds to be made available to them (directly or indirectly). It is also a breach of the law to contribute to activity that would aid the commission of these offences, or to assist with the circumvention of imposed sanctions.

Assessing the risk of exposure to designated persons is likely to be part of the duty of a firm's money laundering reporting officer (MLRO), who will therefore need to make the appropriate checks that clients or beneficiaries of the activity undertaken are not on that list. The Law Society expressed worry in 2009 that almost half the respondents to its survey had never checked their clients against the sanctions list.

Checks may be performed manually against the published list of designated persons, and some of the e-verification solutions available will include this information in their exhaustive tests.

If a client or beneficial owner does prove to be on the sanctions list, the transaction being handled for that person must be suspended by the firm and the Treasury's Asset Freezing Unit alerted. (A Suspicious Activity Report should be filed with the Serious Organised Crime Agency if money laundering activity is suspected.) A licence may be sought from the Asset Freezing Unit to continue with the transaction if the firm in question so desires.

Counter-terrorist finance and money laundering training solutions
No reputable firm would wish to be party to the funding of a terrorist organisation, or to be implicated in any money laundering activity that allows funds to pass to such organisations. It is clearly wise, therefore, for firms to provide training that will ensure staff and principals can recognise attempts to use their firm in such a manner, as required by The Money Laundering Regulations 2007.

ML Solutions 4U provides solutions that allow such firms to provide anti-money laundering training packages that can embrace such issues as terror financing and customer due diligence, or focus directly on a single issue within the relevant legislation, as a client requires. These flexible training packages can be delivered in a seminar environment, through workshops or with e-learning modules delivered to your firm's own network.

For more information about anti-money laundering training and counter-terrorist financing services from ML Solutions 4U, please contact our team of advisors by telephoning 0845 402 0001, or complete our online contact form and a representative will contact you directly.

Money Laundering Information » Sanctions and Counter Terrorist Finance Law