Global: UK Companies Lag in Sanctions Screening Amid Global Tensions

A survey conducted by UK-based regtech SmartSearch reveals that UK companies are falling behind in screening potential clients for sanctions compliance, despite heightened global geopolitical unrest. Only 25% of surveyed companies consistently check new customers against lists of sanctioned or politically exposed persons (PEPs), indicating a significant decline from the previous year’s 73%.

This decline is particularly concerning, given recent geopolitical tensions, such as those between the US and China and the aftermath of the Russia-Ukraine conflict, resulting in several Russian oligarchs being sanctioned. SmartSearch warns that the failure to address this compliance gap could swiftly categorize UK businesses as high-risk entities.

Notably, the financial services sector has experienced one of the most significant declines in compliance, dropping from 66% to 22% over the past 12 months. Martin Cheek, Managing Director of SmartSearch, emphasizes the risk of complacency on compliance, stating that occasional checks are insufficient, and companies could face severe penalties, including substantial fines.

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