Economic, trade or financial sanctions are imposed by governments or the United Nations to exert pressure on individuals or political regimes and for the advancement of foreign policy objectives. Sanctions include a range of financial or trading restrictions, such as freezes on the assets of and travel restrictions on nominated individuals, bans on financing of state-owned enterprises, prohibitions on the supply of technical, financial and other assistance and outright prohibitions on trade. In the UK, a person or firm who breaches the terms of a sanction is guilty of a criminal offence.
Who imposes sanctions? For persons working in the Lloyd’s market, the most important sanctions are are likely to be those imposed by the United States government and the European Union (EU). EU sanctions are typically imposed through Council Regulations, which have immediate legal effect in member states (including the UK). In the US and the EU, sanctions often implement measures contained in Resolutions of the United Nations Security Council.
Sanctions can be applied unilaterally or collectively and different rules will apply to each sanctions regime.
Some of these sanctions affect designated individuals only in the targeted country. There are also sanctions in place against named individuals or entities who:
Are indicted by the International Criminal Tribunal for former Yugoslavia;
Belong or are related to the Taliban, Usama Bin Laden and the Al-Qa’ida network;
Are suspected terrorists.
How can I check if an individual or company is targeted by financial sanctions?
Access the HM Treasury Consolidated list of Financial Sanctions targets.
The HM Treasury publishes a consolidated list of financial sanctions targets listed by the United Nations, the European Union and the UK. This list includes all individuals and entities noted on all current sanctions lists.
There are a number of statutory instruments relating to financial sanctions and terrorist financing. These measures apply to all firms regulated under the FSMA (rather than just to banks, on whom additional obligations are placed) and create a number of offences including that of failing to disclose knowledge or suspicion that any person on the relevant HM Treasury sanctions list is, or has been, a customer of the firm.
The summary on the right hand side of this page is provided as general guidance. For a full a understanding of the legal obligations imposed by the these measures, firms should refer to the relevant statutory instruments and/or take legal advice.
There is no specific statutory or regulatory obligation on general insurers to check their customer lists against the HM Treasury sanctions lists; however, in order to avoid committing an offence of non-disclosure, it would be prudent for firms to do so.
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