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CEI Compliance is the UK's fastest growing regulatory consultancy and provides associate opportunities to consultants and cost effective value to financial services and other regulated companies.

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  1. 1. Sanctions And YouAn Affordable Solution to theCompliance RequirementsLee Werrell FInstSMM Chartered MCSI Cert PFS
  2. 2. Sanctions & You By CEI Compliance Limited Sanctions The Legislation The Money Laundering Regulations 2007 became law on 15 th December 2007 and explains the measures that a company must employ to detect and prevent money laundering. The Proceeds of Crime Act 2002 (including the Asset Recovery Agency) provided specific money laundering offences and investigative powers, including the seizure of assets. Sanctions are made against countries, companies and individuals where the UK government considers that allowing them financial freedom would harm or endanger others and are typically used by the international community as a whole. In the UK (and in UK jurisdictions) The Foreign & Commonwealth Office is responsible for the overall policy on international sanctions and HM Treasury is responsible for the implementation and administration. Absolute compliance is demanded. Failure to comply can result in prison terms of between 2 and 7 years depending on the seriousness of any breach. In the financial services world we all know that it is a crime to advise or transact any business with a listed individual and the 7 year imprisonment term, and / or a fine, can be imposed if it is established that this has happened. 1“Money Laundering regulations place a general obligation on firms within its scope to establish adequate and appropriate policies and procedures to prevent money laundering. Failure to comply with this obligation risks a prison term of up to two years and / or a fine.” This means that firms must ensure they have reasonable processes and 1 Source = August 2009 Joint Money Laundering Steering Group’s consultation document on prevention of money laundering / combating terrorist financingCEI Compliance limited
  3. 3. Sanctions & You By CEI Compliance Limited procedures in place to prevent the movement of money, from or for, crime and terrorism through their firm and even failure to have adequate systems, is potentially sufficient to bring about a prosecution and potentially result in a 2 year term of imprisonment. IMPORTANT - While the legislation clearly states that it is unacceptable for firms to deal with anyone who is present on the Sanctions list, exactly how they should comply with the requirement is not specified – hence in the development of, guidance has been taken from both the Joint Money Laundering Steering Group (JMLSG) and the Financial Services Authority (FSA). Both of these organisations state that companies need a system or procedures in place through which they can actually demonstrate that their clients are not listed – not only at introduction - but also ONGOING. The regularly updated Sanctions list is freely available as a CSV document from HMTs website ( and manual checking against this list is indeed possible. However, since real proof of compliance requires the ability to show an audit trail that proves clients are absent from the lists on an on-going basis, manual checks are proving to be at best cumbersome with – and at worse unreliable. There are many solutions from an expanding number of companies and all are charging a variety of fees for the service of sanctions list checking, including the “fuzzy” matches of misspelt and sound-a-like names used by criminals and terrorists, but I believe that we have found a true gem. One of the on the market is £199 annual membership which included 10 search credits and additional credits could be purchased for £1.00 each minimum of 50 credit bundles. This would mean that for a company dealing with 300 new clients per annum, ignoring any initial screen would cost in the region of £500 initial, and then the same amount every time there was an HMT update. Looking further into this area we found this excellent value service at a cost akin to visiting your favourite coffee shack. Starting at only £20 for the first 100 clientsCEI Compliance limited
  4. 4. Sanctions & You By CEI Compliance Limited on an initial and on-going basis, with only £10 for each 100 clients after this, it is a steal. CEI Compliance recommends that you consider the valuable offer from Sanctions Search. You can contact them at Sanctions Search Professional Office 45 Market Street Hoylake Wirral CH47 2BQ Telephone 0845 652 67 67 Fax 0151 632 2117 And their website is Details correct at time of printing (Oct 2010)For help call:Lee Werrell – FInstSMM Chartered MCSI Cert PFSManaging DirectorCEI Compliance Compliance limited