According to a recent survey, UK companies are struggling to meet the requirements for sanction-screening prospective clients amidst increasing global geopolitical tensions. Data from UK-based regtech SmartSearch reveals that only 25% of the surveyed companies consistently check new customers against sanctioned or politically exposed persons (PEPs) lists. This represents a significant drop from the previous year, when 73% of companies adhered to strict screening protocols.
The decline is particularly concerning given the escalating geopolitical tensions involving the US and China, as well as the ongoing repercussions of the Russia-Ukraine conflict, which resulted in many Russian oligarchs being added to sanctions lists for the first time. SmartSearch warns that the lack of compliance could turn several UK businesses into high-risk entities almost overnight.
Even more alarming is the financial services sector, which has seen compliance rates plummet from 66% to just 22% over the past year. “The decline in this year’s data highlights a troubling complacency regarding compliance,” commented Martin Cheek, managing director of SmartSearch. He emphasized that sanctions are part of a dynamically evolving foreign policy landscape, and firms that believe occasional checks suffice are not only being naïve, but also risking severe penalties, including hefty fines.
The survey involved 500 compliance decision-makers from various financial services firms and intermediaries, such as mortgage brokers, law firms, accountants, and estate agents.