Should I worry about Sanctions for UK Clients

For many small firms, sanctions feel like a distant concern — something reserved for global practices dealing with oligarchs or international trade. Yet the reality is different. Even local high street firms, acting only for familiar British clients, can unwittingly find themselves exposed.

At Alexander Christian, we understand that sanctions compliance isn’t about suspicion or bureaucracy. It is about protecting the business you’ve built and the trust your clients place in you.

What are Sanctions?

Sanctions are tools used to achieve foreign policy and national security objectives. They come in various forms, including financial, trade, transport, and immigration sanctions.

What is the Purpose of Sanctions?

The primary purpose is to prohibit actions for or on behalf of designated persons or entities without a licence from relevant authorities. This aims to restrict their access to financial services, assets, and other resources.

What are the Consequences of Breaching the Sanctions Regime

Breaching the UK sanctions regime is a criminal offense, carrying severe penalties such as significant fines and imprisonment.

The government expects every firm — large or small — to have robust controls in place. Key steps include:

• Client Screening: Ensuring no client or counterparty is a designated person or entity.

• Match Resolution: Investigating and documenting any potential matches before proceeding.

• Record Keeping: Maintaining an audit trail that demonstrates the reasoning behind every decision.

• Governance: Embedding sanctions compliance into risk assessments, reporting lines, and staff training.

Myth 1: “My firm doesn’t act for Russians.”
Sanctions are not nationality-based. They target specific individuals and entities, regardless of passport.

Myth 2: “All my clients are local or British citizens.”
British nationals and UK residents can still be sanctioned. Some appear on lists for links to terrorism, organised crime, or extremist groups.

Myth 3: “Only large, international firms need to check.”
Sanctions apply to everyone. In fact, smaller firms may face greater risk if they lack robust systems or rely on assumptions.

On the surface, sanctions compliance may seem straightforward. Yet when a regulator, or auditor, or even a client asks you to justify your position, gaps can quickly become apparent.

This is where many firms stumble:

• Assumptions made about clients go undocumented.

• Matches are discounted without adequate notes.

• Screening processes are inconsistent or incomplete.

The real question is not whether you should worry about sanctions — but whether your compliance would withstand scrutiny.

• Government Guidance: Official government resources outline expectations for compliance.
• OFSI Video Guidance: The Office of Financial Sanctions Implementation (OFSI) provides video guidance on adhering to the financial sanctions regime.
• SRA Guidance: The Solicitors Regulation Authority (SRA) offers guidance on controls firms should have in place, including webinars addressing common sanctions-related questions.