Russia Sanctions expose businesses to increased Anti-Money Laundering risks

auditor auditing

SHARE

According to a recent survey, up to 70% of professional services businesses have neglected to update their anti-money laundering (AML) policies after tougher sanctions were put in place against Russia. If found to be in breach of the rules, firms are running the danger of fines and reputational harm.

AML software supplier, SmartSearch, carried out a survey of 500 professional services businesses operating in the property, legal and finance sectors. The results of the survey reported that 70% of property businesses, 47% of legal businesses and 34% of financial services firms had not updated their AML procedures despite the increased sanctions that Russia have been subjected to following their invasion of Ukraine earlier this year.

A further finding of the survey was that a large number of the participant businesses were reliant on hard copy documents to complete identity checks. Despite this, many firms reported they would find it hard to spot fake identity documents. The conductor of the survey suggests it would be faster and more secure for businesses to use electronic verification methods to onboard new clients, which they claim it would be ‘virtually impossible to fake’.

Managing Director of Smart Search, Martin Cheek commented “Our latest survey shows the worrying size of the challenge when it comes to closing the AML loopholes being exploited by criminals.” He further commented “Some firms are unwittingly exposing themselves, and the UK, to the proceeds of some of the world’s worst crimes – people trafficking, drug running, tax dodging and scammers who prey on the most vulnerable.”

Matthew Golightly – Associate Director – Claims & Technical at Brunel Professions commented: “The results of the survey suggest that a large proportion of professional services businesses have neglected to update their AML procedures after tougher sanctions were put in place against Russia; this is somewhat concerning. In addition to the reputational risk of unintentionally offering services to blacklisted individuals or criminal enterprises, AML violations carry severe fines. AML compliance officers should be paying close attention to whether their procedures are as up-to-date and watertight as they can be.”

Details of the survey and campaign undertaken by SmartSearch are published on its website at ‘Electronic Verification Uncovered’.  Additional commentary on the survey has been published by Property Industry Eye and Financial Reporter.

ProfessionalIndemnity.com is owned by Brunel Professions, which is a leading professional indemnity insurance broker in the UK.  Click here to get a quote or call 0345 450 1074 to speak to a broker.

Menu