This article contains information about the financial sanctions imposed by the UK . Financial sanction is an important political force used by countries or international organizations. "What is Financial Sanction?" Before the UK's financial sanctions , Let's answer that.
Economic or financial sanctions are economic pressures applied to one or more targets (state, management, group, person, company) by one or more states or international organizations for political purposes.
The economic sanction is applied for three purposes:
To change the behavior of the target.
To weaken the target.
Punish the target and/or message.
Financial sanctions are a foreign policy instrument between "diplomacy" and "war." It hurts more than diplomatic pressure. It hurts less than war, and it is mostly used to prevent war. But it can also be used during war (Napoleonic Wars, World Wars, etc.) or as a war preparation (Afghanistan, Iraq, etc.). Financial sanctions are at least as effective as a weapon.
Overview of Financial Sanctions in The UK
The purpose of financial sanctions in the UK is to achieve specific foreign policy or national security goals. So, the European Union's sanctions, the United Nations, and the United Kingdom are essential. While the United Kingdom had to comply with the European Union regulations before, this obligation disappeared after the Brexit process. Now acts according to its regulations and, at the same time, supports most EU regulations.
Why Does The UK Enforce Financial Sanctions?
We briefly shared the reasons for the financial sanctions above with you. The general reasons for the financial sanctions imposed by the UK are as follows.
Persons and institutions are committing crimes or operating against the UK.
Persons or institutions engaged in illegal activities, such as terrorist financing and Money laundering.
Violation of human rights. Violation of laws and regulations.
The UK takes its enforcement decisions by the following laws and regulations.
Sanctions and Anti-Money Laundering Act 2018
(SAMLA 2018)
Terrorist Asset-Freezing etc. Act 2010 (TAFA 2010)
Counter-Terrorism Act 2008 (CTA 2008)
Anti-Terrorism, Crime and Security Act 2001 (ATCSA 2001)
Types of Financial Sanctions in The UK
Targeted asset freezes: The UK freezes individuals or organizations' assets that violate the laws and regulations and prevents them from accessing their assets, thereby preventing risks.
Restrictions on a wide variety of financial markets and services:
These restrictions are applied to protect financial markets and services. So, the person's investment and access to capital markets done be prevented.
Who Needs to Comply with Financial Sanctions
All individuals and legal entities living or operating in the UK must comply with the UK's financial sanctions in force. Regulatory bodies heavily fine persons and institutions that violate sanctions. For this reason, companies must regularly follow the sanction lists to prevent sanction violations.
The
"Know Your Customer (KYC)"
and
"Customer Due Diligence (CDD)"
procedures are obligations that enable financial sanctions to be detected. Therefore, organizations under the AML obligation must meet KYC and CDD obligations during the customer onboarding process. Accordingly, companies collect customer information first and then check the accuracy of customer information. The second stage is to make a risk assessment.
Persons in sanctions lists,
PEP lists
and
Adverse Media
lists are high-risk people for financial institutions. Therefore, to protect themselves from the risks and ensure AML compliance, companies must detect their high-risk customers by applying sanctions, PEP, and adverse media screening.
Sanction Scanner collects sanction, PEP, and Adverse Media data from more than two hundred countries and monitors them in real-time. Sanction Scanner's AML database contains the sanctions lists of the United Nations, European Union, UK, and the USA. Companies wishing to avoid sanctions violations and ensure AML compliance can automatically meet UK's AML obligations with our "AML Name Screening Software."
