Industry News

UK tax advisors and trust providers can now be fined for not reporting sanctioned clients

Thursday, 10 August, 2017

Trust and company services providers and tax advisors are now liable for heavy fines if they fail to tell the government that they are acting for someone subject to international financial sanctions, under new Treasury regulations issued this week.

The European Union Financial Sanctions (Amendment of Information Provisions) Regulations 2017 came into force on 8 August 2017. The freezing orders to which they refer were already in force, and, in fact, all businesses were in principle already required to report to HM Treasury if they were acting for anyone they suspected might be subject to such financial sanctions.

Disobeying these reporting requirements was, however, only a criminal offence if done by a financial services firm.

The new regulations extend these offences to many other businesses and professions operating in the UK, which are now at risk of penalties if they fail to report their dealings with affected clients. These businesses are:

  • tax advisors;
  • trust and company service providers;
  • external (i.e. not in-house) accountants and legal professionals;
  • estate agents;
  • auditors;
  • dealers in precious metals or stones; and
  • casinos.

'These regulations, and the approaching Financial Action Task Force inspection, are further reminders of the importance the UK and global community places on tackling terrorist financing', commented Crispin Passmore, policy Director at the Solicitors Regulation Agency. 'Risks exist for every single solicitor and law firm, whether conveyancing on the high street or handling global transactions, and each should be thinking about their responsibilities for tackling these issues.'

The Office of Financial Sanctions Implementation (OFSI) has updated its guide to financial sanctions to help individuals and businesses understand and comply with reporting requirements.


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