The SRA has today published updated guidance on complying with the UK sanctions regime, reinforcing its expectations of law firms and legal professionals in an increasingly complex regulatory environment.
Sanctions compliance is no longer a niche or “high-risk only” issue. The SRA is clear that all regulated firms, regardless of size or practice area, must understand and manage sanctions risk effectively.
Why the Updated Guidance Matters
The UK sanctions regime imposes criminal, civil and regulatory obligations. Breaches can result in severe penalties, reputational damage, and regulatory action.
While the guidance does not replace the underlying legislation, it explains how the SRA expects firms to comply with their regulatory duties alongside sanctions laws — and what good practice looks like in reality.
The update reflects the SRA’s supervisory experience and signals that sanctions compliance is now considered a business-as-usual compliance obligation, not an exceptional one.
Key Changes in the Updated Guidance
The updated guidance includes several important developments:
- Clearer structure – General obligations applying to all firms are now set out upfront, with specialist content later in the guidance
- Recognition that sanctions compliance is established – The regime is no longer treated as “new”
- Expanded practical examples drawn from recent inspections
- A new case study showing how firms may become involved in sanctions issues unintentionally
- Updated red flags, including expectations around staff screening at onboarding
- Greater clarity on reporting obligations to the SRA
- Further guidance on licence compliance, particularly where OFSI or OTSI licences apply
What the SRA Expects from All Firms
The guidance applies to every SRA-regulated firm, even where sanctions work is not part of the firm’s usual services.
1. Client and Counterparty Due Diligence
Firms must understand who they act for, including beneficial owners. They should also screen counterparties and any other relevant parties against UK sanctions lists.
2. Policies and Procedures
Firms should have documented sanctions policies that are implemented, understood by staff, and reviewed regularly.
3. Risk Assessments
Sanctions risk should form part of client and matter risk assessments, with decisions clearly documented.
4. Ongoing Monitoring
Sanctions designations change frequently. Firms must monitor clients and matters on an ongoing basis, not just at onboarding.
5. Training and Awareness
Staff should receive appropriate training on sanctions risks and internal escalation procedures, supported by alerts from HM Treasury and relevant authorities.
6. Governance and Oversight
Senior management must have visibility of sanctions risk, with appropriate reporting, controls and independent review.
Reporting and Licensing Obligations
Where firms identify a potential match with a designated person or a possible breach, they must understand when to report to:
- Government authorities (such as OFSI or OTSI), and
- The SRA, in line with regulatory reporting obligations.
Where a firm acts under a licence, strict compliance with licence conditions is essential, including how fees are charged and payments are received.
Practical Steps for Firms Now
Firms should consider:
- Reviewing and updating sanctions policies and procedures
- Ensuring screening covers clients, counterparties and staff
- Embedding sanctions checks into existing AML and risk frameworks
- Assigning clear responsibility for sanctions compliance
- Keeping evidence of decisions, checks and escalation actions
How Legal Compliance Services Can Help
The SRA’s updated guidance reinforces that sanctions compliance must be proportionate, documented and embedded across the firm.
Legal Compliance Services supports law firms with:
- Sanctions risk assessments
- Policy and procedure reviews
- Staff training
- Compliance audits and ongoing advisory support
If you would like help reviewing your firm’s sanctions framework, please get in touch.
