The UK government introduced updates to the Sanctions (EU Exit) (Miscellaneous Amendments) (No.2) Regulations 2024 on Nov. 14, expanding the scope of "relevant firms" to include four new sectors. This move aims to bolster compliance across a broader range of industries.
The amended regulations now specifically address letting agents, insolvency practitioners, high-value dealers (HVDs), and art market participants (AMPs). These sectors will now face new compliance and reporting obligations to reduce the risk of violating UK financial sanctions laws. These changes take effect on May 14, 2025.
The changes underscore the government's commitment to improving sanctions enforcement beyond the financial sector, with guidance urging businesses to integrate sanctions screening as a core component of their operations. Ongoing monitoring and adaptation to evolving sanctions lists will be essential for these industries to maintain effective compliance systems.
New sectors, new guidance:
Letting agents must ensure they do not provide services to individuals or entities on sanctions lists. This includes thoroughly screening tenants, landlords, and associated parties. If an agent identifies a match with a sanctions target, they must report it to the Office of Financial Sanctions Implementation (OFSI). Failure to comply can result in significant penalties, underscoring the need for ongoing monitoring and due diligence.
Insolvency practitioners must screen all parties involved in insolvency cases to ensure no transactions involve designated individuals or entities. They are required to freeze assets and report any relevant activities to OFSI. Practitioners must obtain a license for any restricted transactions. Compliance measures should include record-keeping and regular audits, as violations may result in civil penalties.
HVDs and AMPs will also face stricter requirements. They must implement and annually review screening systems tailored to their business risk profile. Due diligence must be applied rigorously for high-risk transactions. Additionally, businesses are required to document their system capabilities and limitations to demonstrate to regulators that their processes are appropriate and meet the necessary standards.
For more detailed information, refer to the UK government’s guidance for letting agents, insolvency practitioners, and HVDs and AMPs.
The amended regulations now specifically address letting agents, insolvency practitioners, high-value dealers (HVDs), and art market participants (AMPs). These sectors will now face new compliance and reporting obligations to reduce the risk of violating UK financial sanctions laws. These changes take effect on May 14, 2025.
The changes underscore the government's commitment to improving sanctions enforcement beyond the financial sector, with guidance urging businesses to integrate sanctions screening as a core component of their operations. Ongoing monitoring and adaptation to evolving sanctions lists will be essential for these industries to maintain effective compliance systems.
New sectors, new guidance:
Letting agents must ensure they do not provide services to individuals or entities on sanctions lists. This includes thoroughly screening tenants, landlords, and associated parties. If an agent identifies a match with a sanctions target, they must report it to the Office of Financial Sanctions Implementation (OFSI). Failure to comply can result in significant penalties, underscoring the need for ongoing monitoring and due diligence.
Insolvency practitioners must screen all parties involved in insolvency cases to ensure no transactions involve designated individuals or entities. They are required to freeze assets and report any relevant activities to OFSI. Practitioners must obtain a license for any restricted transactions. Compliance measures should include record-keeping and regular audits, as violations may result in civil penalties.
HVDs and AMPs will also face stricter requirements. They must implement and annually review screening systems tailored to their business risk profile. Due diligence must be applied rigorously for high-risk transactions. Additionally, businesses are required to document their system capabilities and limitations to demonstrate to regulators that their processes are appropriate and meet the necessary standards.
For more detailed information, refer to the UK government’s guidance for letting agents, insolvency practitioners, and HVDs and AMPs.
