Regulatory update for Insolvency Practitioners: Importance of reviewing updates to the OFSI Sanctions List

IPA Insolvency Practitioner newsletter AML Digest, September 2023

Contents

• David Holland, Chief Inspector and IPA Money Laundering Reporting Officer
• Spotlight on AML and Fraud (CPD: 5h)
• Reminder: High-risk countries for money laundering purposes: Enhanced Due Diligence
• Proliferation Financing
• New SARs Glossary Code & Reporting Routes Guidance
• The Economic Crime (Anti-Money Laundering) Levy (Amendment) Regulations 2023
• SARs in Action
• Updated guidance on submitting better quality Suspicious Activity Reports
• AASG/NCA alerts
• OPBAS – Supervisory Report 2022/23 and the Supervisory Regime consultation
• AML supervision
• The Insolvency Practitioners (Amendment) Regulations 2015 – Regulation 3
• New SARs Reporter Booklet

Introduction

As an Insolvency Practitioner operating in the regulated sector, it is imperative to stay informed about the latest developments in regulatory compliance. In this regard, we would like to draw your attention to the continual updates to the Office of Financial Sanctions Implementation (OFSI) sanctions list. This article aims to provide you with essential information and guidelines on the importance of reviewing the updated OFSI sanctions list, its impact on your role as an Insolvency Practitioner and the measures you should take to ensure compliance.

Understanding the OFSI Sanctions List

The OFSI Sanctions List is a comprehensive record of individuals, entities and countries subject to financial sanctions imposed by the United Kingdom and the European Union. These sanctions are designed to combat money laundering, terrorism financing and other illicit activities. By adhering to the Sanctions List, Insolvency Practitioners fulfil their legal obligations and contribute to a safer financial system.

Updates and their relevance

Click here to access the OFSI sanctions list and view updates to the list. It is crucial to review updates carefully, as they may include new entries or changes that directly impact your work as an Insolvency Practitioner. Ignorance of these updates can lead to severe consequences, including legal liabilities, reputational damage and financial penalties.

Key considerations for Insolvency Practitioners

1. Regular review: As an Insolvency Practitioner, it is your responsibility to establish a process for regularly reviewing the OFSI Sanctions List updates. This ensures that your internal records and due diligence procedures align with the latest sanctions, enabling you to identify and mitigate risks associated with sanctioned entities effectively. It is important to be able to demonstrate effective procedures are in place and that this is supported by staff training and policies that can be shown to be effective from regular reviews.
2. Client Due Diligence: OFSI sanctions updates may affect your ongoing insolvency cases and engagements with creditors. Therefore, it is essential to conduct thorough due diligence on all relevant parties involved in insolvency proceedings. This includes checking their status against the updated OFSI Sanctions List to ensure compliance and mitigate any potential risks
3. Reporting obligations: In cases where you discover a connection between a sanctioned entity and an insolvency case or creditor, it is essential to report this information promptly to the relevant authorities. Cooperation and timely reporting demonstrate your commitment to transparency, regulatory compliance and safeguarding the national security goals and UK financial system.
4. Training and awareness: Ensure that all members of your team receive regular training and updates on OFSI sanctions and their implications for insolvency proceedings. Creating a culture of compliance within your organisation helps foster a strong commitment to regulatory adherence and helps reinforce the reputation of a responsible insolvency profession.

Conclusion

Reviewing and incorporating the updates to the OFSI sanctions list is vital for Insolvency Practitioners operating in a regulated sector. The insolvency sector is deemed to be high risk under the National Risk Assessment. By remaining vigilant, conducting thorough due diligence and promptly reporting any connections to sanctioned entities, you contribute to a transparent financial system while safeguarding the interests of creditors and stakeholders. Failure to comply with OFSI sanctions can result in severe legal and reputational consequences. We strongly advise you to carefully review OFSI Sanctions List updates and take appropriate measures to ensure compliance in your insolvency practice, which starts with effective customer due diligence and includes creditor awareness.  

If you have any questions or require further assistance in understanding and implementing the OFSI Sanctions List updates, please do not hesitate to reach out to your AML supervisor.