FSA warns financial firms about blacklist compliance

Thursday 30th April 2009

The Financial Services Authority has warned small and medium sized institutions that controls need to be improved in order to avoid doing business with members on the Government’s “blacklist” of financial sanctions, according to a report earlier this week in The Times newspaper.

The blacklist is managed by the Treasury and consists of around 1,400 individuals and 500 entities linked to terrorist financing in Britain and abroad.

Following a survey of 228 financial firms by the regulator, it was found that there was widespread confusion about the sanctions regime. Many smaller businesses remain unaware that it is a criminal offence to provide banking or other financial services to blacklisted clients and company directors can face imprisonment or a fine if convicted.

The FSA has urged small firms to make sure they have sufficient controls in place in order to screen clients. Software such as the Financial Sanctions Register (FSR) Checker, from Linksfield Technologies, is designed to help smaller businesses compare their customer lists with updates from the Treasury’s list of financial sanctions targets.

The FSR Checker can either run on site (integrating with other back office systems and facilitating batch processing), or give an online, web-based version targeted primarily at brokers who want to do ad-hoc searches.

Both versions produce the necessary reports to evidence to the FSA that appropriate searches are being run regularly against the blacklist.

Mark Posniak, Head of Business Development at Linksfield, said: “We have been aware of the challenges that all financial institutions face for quite a while now. We are excited by the upcoming launch of our online version of our system, which is specifically aimed at small and medium-sized financial institutions, and is priced accordingly. By making the solution as cost-effective as possible, we’re ensuring that there are no excuses for non-compliance!”

Customers can now use a free online trial of the service, which includes up to 5 free searches, at www.linksfield.com/fsr.