The FCA reviewed sanctions systems and controls across more than 150 firms since February 2022 and identified both examples of strong practice and recurring control deficiencies.
Key updates include:
➡️ Improved Controls: Firms demonstrated stronger sanctions controls, with repeated examples of identifying and preventing potential sanctions breaches before they occurred;
➡️ Common Root Causes: Weaknesses in customer due diligence (CDD), alert management, transaction and name screening, frozen asset management, and licence compliance remain the primary drivers of reported sanctions breaches;
➡️ Trade Sanctions Challenges: Firms continue to face difficulties detecting and preventing breaches of trade sanctions requirements;
➡️ Good and Poor Practice Findings: The regulator published examples of effective and ineffective approaches to help firms benchmark and improve their sanctions frameworks; and
➡️ Ongoing Regulatory Expectations: Firms are expected to maintain proportionate, risk-based sanctions controls that can respond to evolving sanctions risks and obligations.
✅ Firms should review sanctions governance, screening, due diligence, alert management and trade sanctions controls against the FCA’s findings, utilising the best practice outlined in the review and identify weaknesses that could increase the risk of sanctions breaches.