Blog: UK Sanctions Post-Brexit – 3 Things You Should Know
No one can predict what will happen after October 31st, and with the situation remaining fluid the impact that upcoming UK sanctions will have on business remains unknown. This uncertainty has resulted in many organisations failing to prepare for the impending exit from the European Union and many are finding that they may not have systems in place or resources available in case of a “No Deal” scenario.
But apart from the normal buzz of Brexit points, regarding economic concerns, immigration and border controls, etc. – there’s one area of focus which could be seen as a bit more obscure to some – the Sanctions and Anti-Money Laundering Act 2018.
With the help of this legislation, the UK will be able to implement its own framework for its sanctions and anti-money laundering regimes. The Act was first proposed to enable the UK to maintain “business as usual” after leaving the EU, in the areas of sanctions and anti-money laundering alone. However, now that the Act has passed, the position is not quite that simple.
So, what does that mean for your organisation and how can you prepare yourself for the Post-Brexit world of sanctions? Here’s some things to know:
1. KNOW YOUR CUSTOMER BEYOND JUST A NAME
The government will gain the power to designate persons not only by name but also by a description in situations of asset freeze where it is difficult to identify by name alone, which could expand the reporting requirements. This change will increase the burden of screening within your organisation and create uncertainty for those tasked with identifying individuals, adding strain to the due diligence process. Therefore, it is necessary to update screening content subscriptions for any new DPL lists and ensure UK lists are updated daily.
2. BE COGNIZANT OF EU & UK SANCTION REGIME OVERLAPS & INCREASED REPORTING
Although similarities will exist for EU & UK sanctions and how they are applied, it will be pertinent to make sure you remain compliant amongst both regimes in case of any slight variations. The EU imposes reporting requirements on all natural and legal persons, but the UK reporting requirements currently only apply to some professionals and businesses. Under the Act, the UK will extend the reporting requirements to natural and legal persons. While this impact may not raise alarms for companies who already comply with EU requirements, some UK Businesses may face additional compliance burdens.
3. UK COULD TOUGHEN ITS STANCE ON HUMAN RIGHTS VIOLATIONS
The Magnitsky Powers allows the UK to impose sanctions to punish or deter violations of human rights and promote compliance with international human rights. However, it is not certain what the scope looks like for how the UK considers “respect for human rights.” This will result in the need for companies to carry out more stringent human rights’ due diligence for their value chain which will result in more checks, time planning and costs needed.
GET BREXIT READY – NEXT STEPS
At OCR we are following Brexit developments as they unfold and considering the implications of what Brexit might mean for our customers. If you are unsure if your business is ready, get in contact and speak to one of our solution experts who can help future proof your business.