The Office of Financial Sanctions Implementation (OFSI) has released a Legal Services Threat Assessment to assist UK legal services providers in understanding and mitigating risks associated with financial sanctions compliance. Since February 2022, the legal services sector has submitted the second-highest number of suspected breach reports to OFSI, accounting for 16% of the total, following the financial services sector’s 65%.
The assessment emphasises the critical role legal services providers play in adhering to UK financial sanctions, especially when offering services to designated persons (DPs). It identifies key threats, including:
- Assisting DPs in restructuring corporate holdings to obscure control.
- Facilitating transactions that could bypass sanctions.
- Providing advice that may inadvertently aid in sanctions evasion.
To strengthen compliance, OFSI recommends that legal services providers:
- Conduct thorough due diligence on clients and their associates.
- Implement robust internal compliance programmes.
- Stay informed about current sanctions regulations and guidance.
The report also includes a fictional case study illustrating potential compliance pitfalls and underscores the importance of proactive measures to prevent inadvertent breaches.
To read the full report, click here.
