UK Stresses Sanctions Compliance Efforts in FCA Annual Report
The U.K. Financial Conduct Authority’s annual report last month included a more “pronounced” focus on sanctions compliance, including details on the government’s ongoing “assessments” of companies’ compliance programs, Baker McKenzie said in an August client alert. The firm said financial institutions operating in the U.K. should be aware that they may need to report potential sanctions violations to the FCA as well as to the country’s Office of Financial Sanctions Implementation, and firms should “re-review their sanctions compliance policies and procedures” due to the FCA’s “focus on the effectiveness of a bank’s financial crime systems and controls.”
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
The report, which covers the U.K.’s 2022/2023 financial year, said the FCA reviewed “nearly 100 suspected sanctions breaches” during FY 2022 and is “proactively” supervising firms to “ensure they have appropriate sanctions systems and controls.” This included “38 proactive assessments looking at firms’ systems and controls.”
Ashley Aldar, chair of the FCA, said the agency has limited resources to conduct oversight of industry and is responsible for surprising “around 50,000 firms,” including the U.K.’s “wholesale markets.” The FCA makes “difficult choices about where to focus finite resources,” he said. The agency scans 100,000 websites a day looking for “unlawful activity,” Aldar said, adding that “big data tools now test firms’ systems to identify sanctioned entities effectively.”