In April 2009, the Financial Services Authority (FSA) published a thematic review on the approach of financial services firms to UK financial sanctions, which was produced by its Financial Crime and Intelligence Division (FCID).

http://www.fsa.gov.uk/pubs/other/Sanctions%20Final%20Report.pdf

The report outlined the FSA’s findings following a review of firms’ compliance with the FSA’s financial crime requirements relating to financial sanctions. The FSA carried out the review to assess current industry practice, and to share examples of the good and poor practices identified.

The FSA was disappointed to find non-compliance in all sizes of firm, across all financial sectors. It considers that many firms need to enhance their financial sanctions systems and controls, and improve their awareness of the UK financial sanctions regime. The FSA set out examples of good and poor practices identified from the review (in table format) in Appendix 1 to the report, and outlined the main misconceptions about the regime in Appendix 2.

Commenting in the foreword of the report, Philip Robinson, FSA Director of FCID, stated:

“This report provides some examples of good practice observed at firms that others could usefully learn from, examples of poor practice, common misconceptions held by firms, and the challenges that all firms face. As there has been interest from the industry to understand what is expected in this area, I would encourage all firms to use this report to increase their awareness of the regime, to draw on the examples of good practice we found in some firms, and to use this report to benchmark their own systems and controls in order to make improvements where necessary.”

Although the report does not constitute formal FSA guidance, it is clear the FSA expects firms to use it in ensuring that their UK financial sanctions systems and controls are effective. To help small firms with compliance in this area the FSA has published a factsheet.

http://www.fsa.gov.uk/smallfirms/resources/pdfs/Sanctions.pdf