This article contains information about the financial sanctions imposed by the UK. The financial sanction is an important political force used by countries or international organizations. "What is Financial Sanction?" Before the UK's financial sanctions, Let's answer that.
Economic or financial sanctions are economic pressures applied to one or more targets (state, management, group, person, company) by one or more states or international organizations for political purposes.
The economic sanction is applied for three purposes:
Financial sanctions are a foreign policy instrument between "diplomacy" and "war." It hurts more than diplomatic pressure. It hurts less than war, and it is mostly used to prevent war. But it can also be used during the war (Napoleonic Wars, World Wars, etc.) or as a war preparation (Afghanistan, Iraq, etc.). Financial sanctions are at least as effective as a weapon.
The purpose of financial sanctions in the UK is to achieve specific foreign policy or national security goals. So, the European Union's sanctions, the United Nations, and the United Kingdom are essential. Since the United Kingdom is a United Nations member, it must also comply with the United Nations sanctions. Since the United Kingdom was a member of the European Union, it also complied with EU sanctions. But, after the Brexit process, this obligation will disappear.
We briefly shared the reasons for the financial sanctions above with you. The general reasons for the financial sanctions imposed by the UK are as follows.
The UK takes its enforcement decisions by the following laws and regulations.
Targeted asset freezes: The UK freezes individuals or organizations' assets that violate the laws and regulations and prevents them from accessing their assets, thereby preventing risks.
Restrictions on a wide variety of financial markets and services: These are the restrictions applied to protect financial markets and services. So, investment of the person and access to capital markets done be prevented.
All individuals and legal entities living or operating in the UK must comply with the UK's financial sanctions in force. Regulatory bodies heavily fine persons and institutions that violate sanctions. For this reason, companies must regularly follow the sanction lists to prevent sanction violations.
The "Know Your Customer (KYC)" and "Customer Due Diligence (CDD)" procedures are obligations that enable financial sanctions to be detected. Therefore, organizations under the AML obligation must meet KYC and CDD obligations during the customer onboarding process. Accordingly, companies collect customer information first and then check the accuracy of customer information. The second stage is to make a risk assessment.
Persons in sanctions lists, PEP lists and Adverse Media lists are high-risk people for financial institutions. Therefore, to protect themselves from the risks and ensure AML compliance, companies must detect their high-risk customers by applying sanctions, PEP, and adverse media screening.
Sanction Scanner collects sanction, PEP, and Adverse Media data from more than two hundred countries and monitors them in real-time. Sanction Scanner's AML database contains the sanctions lists of the United Nations, European Union, UK, and the USA. Companies wishing to avoid sanctions violations and ensure AML compliance can automatically meet UK's AML obligations with our "AML Name Screening Software."