For Money Service Businesses (MSBs), finding out whether sanctions have been levied upon clients with whom they’ll potentially be working, is imperative. Financial sanctions are issued by the Government’s financial regulatory body, the Office of Financial Sanctions Implementation. They’re dealt out to individuals, or organisations (known as the ‘target’) who are deemed to have acted inappropriately in one way or another. This could be anything from the misappropriation of funds, for instance, or something more severe, such as financially offensive behaviour – the funding of terrorist activities.
The aim of these sanctions is to coerce the offensive parties into changing their behaviour. The team here at Impress Solutions, who offer an integrated sanctions checker as part of their Forex trading application, wanted to look at these sanctions in more detail.
What Can A Sanction Entail?
The breadth and depth of the sanctions imposed can vary massively, however the point is, they’re important to know about before you further engage with these financial clients. Incompliance in this area, whether intentional or not, can land your MSB with severe financial and legal consequences – which can be as drastic as seven years’ worth of imprisonment for a UK indictment – therefore the awareness of such sanctions is critical. The sanctions can include the following:
· Asset freezes. This includes both the prohibition of making funds available to a sanctioned person, as well as dealing with any assets belonging to a sanctioned party. This could range between anything from money to property, from vehicles, even to antiques. Nowadays, especially, there’s much more to be aware of, given the advent of cryptocurrencies such as Bitcoin, which the asset freezes also apply to.
· Financial service and market restrictions.
What Does An MSB Need To Do?
The easiest thing for an MSB, then, is not to engage with sanctioned individuals in the first place. This, therefore, involves carrying out thorough sanctions checks to ensure the reputability of who it is they’re dealing with. This involves checking against HMT’s published list of sanctioned targets (for both existing clients and potential new clients) as well as keeping tabs on any changes made to a client’s details.
There’s no denying the importance of such checks. By the same token, however, there’s no getting around the fact that it’s a time-consuming and laborious process, one which ends up using much of an MSB’s administrative resources. This needn’t be the case, though, and as with so much in this recent age of digital innovation, the process of automation can prove transformative for an MSB.
What Do We Offer?
Here at Impress Solutions, we’ve worked in collaboration with Northdoor to offer an integrated sanctions checker as part of our foreign currency trading application. This drastically streamlines sanctions compliance checks for an MSB, and checks against, not only HMT’s consolidated list, but against other worldwide sanctions lists as well, some of which include:
- DoW Jones (PEP).
- OFAC Consolidated Sanctions List.
- Australian Consolidated List.
The software is also highly configurable, and includes other helpful features such as visibility and accountability checks (through full audit trails), reporting features and the identification of false-positive results.
Other Key Areas Of Compliance
Ascertaining whether an individual has had sanctions imposed upon them is only one of the areas in which a financial business needs to be compliant. In fact, it’s one of many. Our foreign currency trading application, isCT, also features anti-money laundering (AML) check capabilities, data compliance features (in line with the latest GDPR regulations) and PSD2 (which helps regulate payment services).
The last thing you want as an MSB is a proverbial black mark against your name, having failed to carry out appropriate due diligence or uphold the necessary levels of compliance. It can set your business back financially for a long time, so it’s much better to always be proactive with your compliance. Our Forex trading application helps do exactly that.
The risk of incompliance is one that will keep many an MSB up at night, such is the potential severity of the ramifications should there be a lack of adherence. An automated solution is a remarkably easy workaround, however, and one which a greater number of businesses should be pursuing. So, if you’d like to find out more about our foreign currency trading application, complete with integrated sanctions checker, then get in touch! Contact Impress Solutions today on 01708 759 760. For more official UK Government guidance on financial sanctions, click here!