SmartSearch comments on NCA amber alert warning of criminals evading sanctions

26 January 2024

Agency (NCA) has just published an amber alert, warning of criminal exploitation by sanctioned high net-worth individuals.

“The January 2024 alert is this time aimed at the art world, but all UK regulated businesses such as accountancy firms, financial services, and property and legal services, should take heed, and make the necessary improvements to their business processes and procedures to guard against criminals evading sanctions as well as laundering the proceeds of crime.

“The NCA alert warns artwork storage facilities to guard against financial criminals, “such as Russian oligarchs [who] hold art in specialist storage facilities for a range of reasons, including secure storage of art as an investment or as a store of value for tax benefits”, said the NCA.

“It’s a raw reminder to all regulated industries of the risk of financial crime, and the importance of conducting regular due diligence checks to understand any change in a client’s circumstances, or in those of the people they represent.

“Client checks at onboarding followed by continuous monitoring helps seal the door to criminals. Firms should look out for changes in client circumstances, making sure they check against international sanctions on a daily basis. They should also watch out for the use of front or shell companies or complex corporate or trust structures, where the waters are muddied, and it isn’t clear exactly who is the ultimate beneficial owner.

“AML monitoring of clients is part of the anti-money laundering procedures required of all regulated businesses, who must follow due diligence procedures as part of their Know Your Customer (KYC) processes. This involves AML checks, which identify and verify the client, as well as Potentially Exposed Person (PEP) and sanction screening. At this point, if the client’s name matches with a PEP, sanction or Relative and Close Associate (RCA) list, the firm must complete enhanced due diligence to assess the client’s level or risk.

“Currently, there are more than 2,000 individuals and entities subject to UK sanctions under the Russian regime.”