Ask The Expert: Jonathan Evans – Senior AML Consultant, FCS Compliance

Ask The Expert: 
Jonathan Evans – Senior AML Consultant, FCS Compliance

J Evans - FCS Compliance


It’s hard to remember a time when the word sanctions didn’t lead our news channels or make the headline story across our broadsheets.  Sanctions have been one of the central levers used by countries across the world as a means of supporting the people of Ukraine while causing economic and personal damage to the Russian economy, President Putin and those that support and profit from the Russian regime.

The sanctions imposed by governments around the world have been tough and it’s likely that they’ll become tougher.  And it’s not just businesses that have been sanctioned but people too.

Together, the US, EU and UK have sanctioned more than 1,000 Russian individuals and businesses all of whom are considered to be close to the Kremlin.

Around the world assets have been seized and questions raised in parliament about the homes owned and rented by Russian oligarchs in prime areas of London.

Sanctions and how they impact prime London agents in their day-to-day business has been one of our most frequently asked questions in recent months.  Our hotline has been busy as agents try to better understand what it means for them.  Can they still deal with Russian clients or should they be turning them away?  And what happens if they’re mid-sale/let and sanctions are imposed?

Sanctions should be considered as an additional layer to anti-money laundering (AML) checks.  The basis of the AML regulations is that an agent fully understands who their client is and in the case of the buyer, where their funds to purchase come from.  The legislation applies to businesses as well as private individuals.

The additional layer comes in the form of UK and International Sanctions lists which are updated daily and identify individuals and business that government’s believe necessary to impose a financial sanction upon.

The lists are publicly available and the UK list can be found here.

However the implementation of the list and how the restrictions are imposed and monitored is coordinated by another government body, the Office for Financial Sanctions Implementation (OFSI).  Their website – which can be found here – includes a section on how to report any concerns an agent may have about their client.

While the vast majority of Russian buyers or sellers’ agents work with, will not fall under sanctions restrictions, we strongly encourage them to consult the lists regularly especially if their clients originate from Russia or have business links with the country.

There are penalties for anyone who breaches those lists!

The situation is fast-moving and new names are added to the lists daily.  The onus is on the agent to check and check regularly.

If an agent’s client appears on the list prior to completion of a sale then the agent must seek a decision from the OFSI as to whether they should continue with the business relationship and ultimately the transaction.

The same applies to tenants.  So up to the point at which the tenant takes the let, agent’s should monitor the government sanctions lists.  And in fact carry on doing so beyond the signing of the tenancy.  The reason for this being that the letting agent will receive the tenant’s monthly/quarterly/yearly rental payments.

Sanctions are an extra layer of scrutiny that’s needed by not just agents in the property market, but also art market practitioners buying or selling works of art.

FCS Compliance is of course here to help and as part of its due diligence and risk assessment work with clients, consults the sanctions lists as a mater of course.  But the reality is whether you work you use the services of FCS Compliance or handle your money laundering obligations in-house, financial sanctions are likely to be with us for some time to come, so getting to grips with the processes now, is time well spent.

About the author

Jonathan Evans was an Officer in South Wales Police for 30 years. He played a central role in the investigation and prosecution of serious crime including fraud, internal police corruption, financial investigation including money laundering and police disciplinary matters. Jonathan is a member of the International Compliance Association (ICA) holding a Certificate in KYC and CDD.