UK Solicitors Regulation Authority updates guidance on sanctions compliance
The UK’s Solicitors Regulation Authority added key updates to its guidance on complying with the UK sanctions regime, reflecting both legislative changes and insights from its own work as sanctions regulations continue to evolve since Russia’s invasion of Ukraine.
The guidance, first published in November 2022 and updated last week, provides practical advice to law firms on avoiding breaches of UK sanctions regulations, with significant changes focusing on strengthened compliance responsibilities.
Among the most notable updates is a new case study demonstrating how firms may inadvertently become involved in the sanctions regime, plus expanded red flags for attempted circumvention that now include self-reporting responsibilities and the requirement to screen staff during onboarding procedures.
‘Working within the sanctions regime is complex and challenging, and firms should not seek to provide these services without first gaining the necessary expertise to do so correctly,’ the SRA warns in the updated guidance, noting that ‘The sanctions regime spans many separate pieces of legislation’.
The authority has clarified reporting requirements and added a new section specifically addressing when firms must report to the SRA itself, not just to sanctions enforcement bodies. The guide also provides further details on staying compliant with licence responsibilities when serving designated persons.
Key updates include clarification on ownership percentages in sanctions regulations, noting that beneficial ownership under anti-money laundering rules is triggered at 25% share ownership, while the shareholding trigger in UK sanctions regimes is commonly 50%.
The fresh guidance incorporates feedback showcasing effective practices observed during recent sanctions inspections, including the formation of dedicated sanctions committees within firms that combine expertise in sanctions, compliance and finance to oversee all related matters.
External information links have been refreshed throughout the document, helping firms access the most current resources as the sanctions landscape continues to evolve.
The SRA emphasises that ‘a breach of UK sanctions is a criminal offence and is punishable by a fine and/or imprisonment’, with four main types of restrictive measures that can be imposed on designated persons: financial sanctions that include asset freezes; trade sanctions that include arms embargoes; immigration sanctions that bar entry to the UK; and transport sanctions affecting aircraft and ships.
