On May 17, 2022 the Financial Conduct Authority (FCA) published a notice on reporting sanctions evasion. The notice states that the FCA “want[s] to hear about sanctions evasion” where it relates to registered firms or companies with UK Listed securities.
The FCA will review all reports to see if it needs to take any further action. Moreover, each report will help the FCA “build up a picture of conduct risk or inform how [the FCA] develop[s] policy and work[s] with partners to assist the UK enforcement of sanctions.”
What to report
The FCA asks for reports on “any sanctions evasion issues or weaknesses in sanctions controls.” This includes not only suspected and/or actual breaches of the sanctions regime, and any methods a reporter believes are being used to breach the sanctions regime, but also “any suggestion that firms have poor sanctions controls.” This could clearly capture a wide variety of conduct related to a firm’s systems and controls.
How to report
There are several ways to report sanctions evasion depending on your position.
- If the report relates to a current or previous employer, the FCA directs reporters to contact the FCA Whistleblowing Team. Reporters may also use this route if they want to speak to the FCA confidentially.
- For an authorised firm reporting issues within that firm which does not require anonymity, reporting should be made in line with other FCA reporting (as per Sup 15 FCA Handbook).
- Where a firm or professional has information about another firm or individual, the FCA requests reporters to fill out a report wrongdoing or misconduct form. The form gives the option to attach any relevant documents.
- Concerns related to the supervisory conduct of a professional body supervisor should go via the contact options on the OPBAS page.
Sharing information with the FCA under these guidelines does not fulfil any other statutory duties to report, e.g., under the Proceeds of Crime Act 2002 or the Sanctions and Anti-Money Laundering Act 2018.
Reporters do not have to give contact information. If they do, they will receive a reference number which the FCA will use to contact them, or which can be used to provide more information on the same issue. However, the FCA will not share any action they take on the reports as such information will be confidential.
Given the confidentiality, it will be difficult to assess the extent to which firms and professionals report under the mechanism. However this gives an indication, similar to the EU whistleblowing mechanism, that regulators are increasingly focused on sanctions evasion.