Agency sanction screening drops despite rising geopolitical tensions

Estate agents are among falling numbers of regulated firms that aren’t checking sanctions and politically exposed persons (PEP) lists, research suggests.

A survey of more than 500 firms by anti-money laundering (AML) platform SmartSearch found only 25% of firms regulated in this area always check new customers for sanctions.

This is down from 73% when a similar survey was conducted last year.

Only a quarter of estate agents said they had followed these screening procedures, down from 37% last year.

The figure was similar in the legal and financial services sector, where it has dropped from 84% and 66% respectively. 

This could be a reflection of the slower property market or a different customer base but SmartSearch queried the drop given rising geopolitical tensions with China and Russia.

Martin Cheek, managing director of SmartSearch, said: "The backslide in this year’s data underlines a worrying theme of complacency on compliance. Sanctions are not a static list, they are a dynamic and rapidly evolving tool of foreign policy. Firms that think occasional checks are sufficient are not just naïve, they're risking severe penalties, including substantial fines.

"Under the Economic Crime Act, breaches of financial sanctions are punishable by fines of up to £1m- and let's not forget the accompanying reputational damage. In this digital age, news travels fast, and being named and shamed for a sanctions breach can be devastating."