Navigating sanctions regulations can feel complex. However, compliance is crucial for UK law firms. A missed sanctions screening can expose your firm to financial sanctions, regulatory penalties, and significant reputational risks.

With sanctions constantly evolving, it's essential to conduct appropriate due diligence throughout the client's lifecycle—from client onboarding to ongoing monitoring and everything in between. This guide outlines how to perform thorough sanction checks, reduce false positives, and ensure your firm stays aligned with UK sanctions lists.

What are sanction checks?

Sanction checks verify whether individuals, entities, organisations, vessels, or aircraft appear on sanctions lists issued by authorities such as the UK's Office of Financial Sanctions (OFSI), the United Nations, or the US Office of Foreign Assets Control (OFAC). These lists highlight individuals or entities subject to sanctions, including asset freezes, travel bans, and trade restrictions.

By conducting thorough sanction checks, law firms can identify whether individuals or organisations are subject to restrictions. This process ensures compliance with the UK’s sanction regime, reduces legal and financial risks, and protects against exposure to penalties.

Why are sanction checks essential for law firms?

The Sanctions and Anti-Money Laundering Act 2018 requires UK law firms to conduct sanction checks. In other words, it's a core compliance task, not just a general best practice. Without proper screening, law firms risk unintentionally engaging with designated persons or entities. 

A breach of UK sanctions is a criminal offence, punishable by a fine of up to £1,000,000 and/or imprisonment of up to 7 years. Enforcement of civil monetary penalties is on a strict liability basis, which means you don’t need to have knowledge or suspicion of a breach. That being said, OFSI has confirmed that while due diligence is not a defence to a prosecution for breach of sanctions, it minimises the risk of inadvertently committing an offence. Therefore, with effective sanctions screening, firms can safeguard their practices and stay compliant.

"But why might individuals, entities, or organisations appear on the UK sanctions list?", you might ask.

Sanctions are often imposed to address serious human rights violations, restrict financial dealings with criminal regimes, or combat unlawful activity across borders. For instance, individuals or organisations involved in human trafficking, terrorism, or corruption may appear on sanctions lists.

Entire countries or their financial institutions can be sanctioned to limit trade, restrict resources, or force compliance with international standards of respect for human rights. Aircraft and vessels may also face sanctions if they're linked to sanctioned entities or used to evade restrictions, particularly in politically unstable areas.

How to conduct effective sanction checks

Conducting sanction checks is essential for compliance, but the process can be complex without the right tools and workflows. Follow the key steps outlined below to ensure your sanction checks are thorough, efficient, and reliable.

Use reliable sanction screening tools

The first step to effective sanction checks is selecting a reliable screening tool. Look for software that provides accurate, real-time access to major sanctions lists like the UK sanctions list, UN sanctions, and OFAC.

Key features to prioritise include:

• Robust search capabilities to quickly match clients to potential risks.
• Integration with existing compliance processes to streamline workflows.
• Tools that reduce false positives, saving time on manual reviews.

With the right platform, firms can screen clients efficiently while maintaining confidence in their results.

Ensure comprehensive coverage

Sanctions imposed by different bodies—such as the UK government, the United Nations, or OFAC—mean law firms must screen globally, not just locally. Focusing only on one sanctions list can leave your firm exposed to risk.

Effective sanctions screening covers:

• Individuals, entities, and organisations.
• Connected parties like beneficial owners 
• Vessels and aircraft
• All relevant lists to avoid compliance gaps.

By ensuring comprehensive coverage, your firm can identify hidden risks and stay compliant with overlapping regulations.

Manage false positives efficiently

False positives are a common challenge in sanction checks. They can delay onboarding, increase manual workload, and disrupt compliance workflows.

To manage this, use tools powered by AI and advanced search functions. Refine search parameters to improve accuracy and reduce unnecessary matches. This ensures your team spends less time reviewing irrelevant search results and more time focusing on genuine risks.

Regularly update screening processes

Sanctions lists change frequently. New individuals, organisations, and measures are added all the time. Without ongoing monitoring, firms risk falling behind and failing to comply with evolving regulations.

To stay compliant:

• Regularly update your screening tools to reflect changes in global sanctions.
• Train staff to recognise and respond to updates in compliance requirements.
• Review your processes regularly to ensure they remain effective and comprehensive.

Staying proactive helps your firm keep pace with shifting regulations and mitigate compliance risks.

Challenges in sanction checks and how to overcome them

While sanction checks are essential for compliance, they come with their own set of challenges. From managing complex regulations to dealing with inaccurate data, these hurdles can slow workflows and increase risk. Fortunately, with the right tools and processes, law firms can overcome these obstacles effectively.

Navigating the complexity of global regulations

UK law firms often deal with international clients, cross-border transactions, or disputes, which means sanctions compliance extends beyond UK lists. Different jurisdictions, such as the US (OFAC), EU, and UN, impose unique sanctions that may overlap or conflict. This requires firms to screen clients and possibly counterparties against multiple global sanctions lists.

Automation tools with global coverage simplify this process by consolidating major sanctions lists—UK, UN, EU, and OFAC—into a single platform. This ensures law firms remain compliant, even when dealing with international clients or transactions.

Ensuring accurate and up-to-date data

Outdated or incomplete data is one of the biggest risks in sanctions screening. A missed name, incorrect record, or overlooked change can expose your firm to regulatory penalties.

To overcome this, rely on tools that:

• Offer real-time updates to sanctions lists.
• Provide access to comprehensive and accurate data.
• Include features like advanced search and filtering to improve reliability.

With accurate, up-to-date data, law firms can screen clients confidently and mitigate the risk of oversight.

Overcoming time-consuming processes

Manual screening can be slow and prone to human error, especially when dealing with large client lists or complex transactions. This increases the likelihood of missed risks and disrupts firm operations.

Automated workflows streamline the process. By integrating sanctions screening tools with existing systems, firms can:

• Screen clients quickly and accurately.
• Automate ongoing monitoring for new sanctions updates.
• Reduce the administrative burden on compliance teams.

Automation not only saves time but also enhances the reliability and consistency of your sanctions checks.

How Legl simplifies sanction checks for law firms

Sanction checks can be complex and time-consuming, but Legl’s tools streamline the process, helping UK law firms remain compliant with confidence. By combining advanced technology with user-friendly features, Legl makes sanctions screening efficient, accurate, and reliable. Here’s how Legl simplifies sanction checks:

• Real-time sanctions screening: Legl’s platform provides instant access to major sanctions lists from the UK, United Nations, EU, and OFAC. This ensures your firm screens individuals, organisations, and entities against the most up-to-date information.
• Advanced search functionality: With robust search capabilities, Legl accurately identifies matches on sanctions lists. It helps reduce false positives by refining results and improving the efficiency of your screening workflows.
• Ongoing monitoring: Sanctions lists change frequently. Legl supports continuous monitoring of clients, alerting your firm when individuals or organisations become subject to sanctions or changes in adverse media status.
• Comprehensive audit trails: Legl maintains detailed records of all screenings, including search results, risk assessments, and decisions. These clear audit trails are essential for demonstrating compliance during regulatory reviews or audits.
• ID verification and PEP screenings: Legl also provides ID verification and PEP screenings. This provides a comprehensive approach to client due diligence, allowing firms to identify politically exposed persons and verify identities seamlessly.

By automating key steps in the sanctions screening process, Legl helps law firms save time, reduce manual errors, and mitigate compliance risks. With Legl, you can focus on serving your clients while staying confident in your firm’s compliance processes.

Final thoughts

Sanction checks are a critical component of a law firm’s compliance framework. They protect firms from regulatory penalties, financial risks, and reputational damage while ensuring adherence to UK sanctions and global regulations.

By adopting reliable tools like Legl, law firms can streamline sanctions screening, reduce false positives, and maintain robust client due diligence processes. Effective compliance doesn’t just protect your firm—it builds trust with clients and strengthens your business.

Simplify your sanction checks, stay compliant, and focus on what matters most: serving your clients with confidence and integrity. Book a demo to learn more about Legl.