7th August 2023Is your ‘Know Your Donor’ policy up to date?

The UK’s response to the Russia-Ukraine War has seen a significant increase in additions to the UK’s Sanctions List. 

Tamara Howe, Director of Financial Crime Prevention, explains why it is essential that the charity sector has appropriate safeguards in place to screen their donors to ensure compliance with this regime. 

All charities within the UK have an obligation to comply with Financial Sanctions. The Sanctions and Anti-Money Laundering Act 2018 (Sanctions Act) is the primary legislation within the UK which governs this regime. The Office of Financial Sanctions Implementation (“OFSI”) manages two lists of those subject to financial sanctions “the Lists”. 

Financial Sanctions exist to enable the government to deliver foreign policy objectives and to prevent and/or suppress brutal and unlawful activities such as nuclear programmes, terrorist activities or armed conflicts. Sanctions can be against any person, company, or even country. 

A charity should conduct a risk assessment to establish where it may be susceptible to breaches of UK sanctions. This should be distinct but contribute towards the charity’s ‘Know Your Donor Policy’. 

Donors who pose a higher risk should be screened against the Lists to ensure they are not a person or party who it is forbidden to conduct business with. This is unless a licence has been granted by the OFSI. It is important to note that this also covers entities owned or controlled by an individual on the List. Therefore, it is essential to identify the ultimate beneficial owner of donor entities. 

Breaches of the UK Sanction regime are severe, both civil and criminal enforcement can occur. Financial penalties can be imposed and/or up to 7 years imprisonment.

If you require any further advice on how to ensure compliance with the UK Sanctions Regime, please contact the Financial Crime Advisory team.

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Tamara Howe
Director - Financial Crime Prevention

020 7380 4957
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