Worried about complying with the ever-changing Russian sanctions? Our checklist will help you ensure your business meets its obligations

Following President Putin’s attack on the Ukraine just over six weeks ago, the UK - along with the US and EU - imposed expansive economic sanctions on Russia.

This posed a huge risk  for regulated businesses all over the UK, because it meant existing customers that had been clear when screened at onboarding, could now be subject to sanctions, and if these were not identified quickly, there was a very real chance the business could be in breach of the new rules.

“When the new sanctions against Russia were announced, it was a huge reminder to regulated firms of the importance of having robust - and real time - compliance processes in place,” explains

Collette Allen, Client Services Director at anti-money laundering specialists SmartSearch.

“Users of our online platform not only benefit from identification, verification and screening of every customer at onboarding, but also from ongoing monitoring. This means that any change to any customers’ status is picked up immediately, which of course, meant that when the new sanctions against Russia were introduced, our clients were immediately alerted about any customers affected.

“However, for businesses with no monitoring in place, it was a case of going through the entire data base to check for any breaches, which is not only impractical, but - with sanctions on Russia changing regularly - almost impossible to ensure ongoing compliance.”

To help businesses ensure they are meeting their obligations under the new sanctions rules, SmartSearch has created a checklist:

1.       Identification and verification

 Regulated firms are obliged to identify and verify every new customer as part of the onboarding process. This means checking not only that the identification documents they are providing are real, but that they match those documents i.e., they are who they say they are.

The easiest and most reliable way to do this is through an electronic check, and SmartSearch has the most robust solution on the market. By combining dual bureau credit reference agency data with facial recognition, document capture and liveness appraisal, digital fraud checks, data referencing and triangulation SmartSearch is able to create the most accurate picture of an individual or business.

2.       Screening

Once verified, the potential customer will need to be screened to check the risk - if any - they pose to the business. This should include screening against global sanctions lists, and checking any other risks - for example, if they are a Politically Exposed Person (PEP), as PEPs are more vulnerable to bribery and corruption.

3.       Enhanced due diligence

If the screening process identifies potential risks, you must run enhanced due diligence - i.e. more in depth checks - to check if the risks identified make it untenable to do business with the individual or business. SmartSearch automatically runs enhanced due diligence on any risks identified, using a range of advanced checking processes including transaction tracking and adverse media analysis to give the business enough information to make a decision about the potential risk posed.

4.       Realtime ongoing monitoring 

Once the individual or business has passed the initial checks, they will be onboarded with the details of the result uploaded and hosted centrally to prove proper due diligence has been done. The entire customer database will then need to be regularly monitored for any changes. The SmartSearch ongoing monitoring service takes updates from Global watchlists every night, immediately identifying any changes to any customer’s status. An example of this is of course the sanctions on Russia - as soon as they came into place, all SmartSearch users were immediately alerted if any of their existing customers were affected.

5.       Retrospective checks

While SmartSearch clients don’t need to worry about whether or not their customer database is in breach of the new sanctions, we are aware that many businesses out there do not currently benefit from ongoing monitoring services; we can help there too:

 High risk country report service

We launched this service specifically in response to the introduction of sanctions against Russia to enable regulated businesses to scan their existing clients and check for residency or citizenship in Russia, Belarus, or any other high-risk countries.

Batch upload

Launched initially to help businesses whose anti-money-laundering procedures have not always been as comprehensive as they could be - or who have legacy clients that were onboarded before AML regulations came into place - our batch upload services enables firms to quickly and easily upload their entire database onto the SmartSearch platform and run a full AML check on each, including screening for sanctions, PEPs and any other potential risks to the business.

In light of the sanctions against Russia, the batch upload service offers a solution for any businesses worried that their existing database may include individuals or businesses now subject to the Russian sanctions. Once uploaded to the platform, they will then benefit from ongoing monitoring of its entire customer database, and receive alerts if a customer’s status changes.

Ms Allen concludes: “The situation in Russia has highlighted the important and ongoing need for compliance processes that are able to work in real-time. We do not know how long the sanctions against Russia will last, or indeed how many more sanctions will be imposed, and rechecking customer databases on an ad hoc basis every time there is a change is simply not practical - not only is it hugely time consuming, but it is also open to errors. Names could easily be missed, putting businesses at the risk of breaching the sanctions.

“The only way to be sure your business is meeting its compliance and sanctions obligations - now and in the future - is to use an online platform like SmartSearch. Our system never goes out of date - any updates or changes to regulations are immediately reflected in the system, and the ongoing monitoring service ensures changes to sanctions are updated in real-time to ensure your customer database is always compliant.”

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