The SRA has confirmed that its annual AML and sanctions data collection exercise will open on 29 June. Firms are required to submit their returns by mid-August. Completion of the exercise is a regulatory requirement and firms that fail to respond may face regulatory action.
Although the questionnaire contains the usual questions about whether firms undertake work within the regulated sector and their exposure to sanctions risks, the more interesting questions relate to the firm’s compliance framework itself. The SRA is asking firms whether they have a compliant AML Firm-Wide Risk Assessment, whether they have documented AML policies, controls and procedures, when those documents were last reviewed, and whether they have assessed their sanctions risks in writing.
Taken together, these questions tell us a great deal about the SRA’s current supervisory priorities. The regulator is not simply interested in identifying which firms are exposed to money laundering or sanctions risks. It wants to understand whether firms have properly assessed those risks, documented their findings, implemented appropriate controls and kept those arrangements under review.
For firms undertaking work within the scope of the Money Laundering Regulations, Questions 4 to 7 focus on the existence and review of AML Firm-Wide Risk Assessments and AML policies, controls and procedures. These are core regulatory requirements and remain common areas of concern during SRA inspections.
Importantly, the SRA is also asking every regulated firm Question 28: whether it has assessed in writing the sanctions risks to which it may be exposed. This reflects the regulator’s increasing focus on sanctions compliance and follows its published guidance encouraging firms to undertake sanctions firm-wide risk assessments. While sanctions risk assessments are not expressly mandated in the same way as AML Firm-Wide Risk Assessments, the SRA clearly regards them as an important part of effective sanctions governance.
Viewed in that context, the annual data collection exercise is much more than a statistical survey. It is a useful indicator of the controls and governance arrangements that the SRA expects firms to have in place and maintain on an ongoing basis.
Need Help? If you would like advice or support with your firm’s AML or sanctions compliance arrangements, including Firm-Wide Risk Assessments, AML policies and procedures, sanctions risk assessments, independent audits, training or preparation for the SRA’s annual data collection exercise, please get in touch. We would be delighted to help.
