Sanction rules put burden on UK institutions

A SPIKE in the number of sanctioned individuals and organisations is triggering increased compliance burdens for British banks keen to avoid hefty penalties from regulators, analysts say.

Economic sanctions imposed by the UK have shot up by three per cent from 2,401 in July 2014 to 2,477 last month, according to City-based law firm Pinsent Masons.

Banks, such as RBS which increased its compliance team by 730 between 2011 and 2013, are being forced to beef up these departments to cope with the administrative hassles linked to sanctions.

Although the compliance burden on banks has become “difficult” to control, banks have “no choice but to increase their focus on compliance as any mistakes in this area raise the risk of severe fines, from the UK and other jurisdictions who may have imposed a sanction against that client,” said Pinsent Mason partner Tom Stocker.

Iranian sanctions, which account for almost a quarter of all designated by UK, may be de-listed if a nuclear deal signed in Vienna earlier this month goes ahead, the lawyers said.