Sanctions Reporting for Letting Agents
Since 14th May 2025, UK letting agents have been classified as “relevant firms” under financial sanctions regulations, requiring them to report any knowledge or suspicion of financial sanctions breaches or designated persons to the Office of Financial Sanctions Implementation (OFSI).
What is a sanctions check?
A sanctions check is a process used to screen individuals, companies, or organizations against official government or international sanctions lists to ensure they’re not involved in illegal or restricted activities, such as:
- Terrorism
- Money laundering
- Human rights violations
- Weapons proliferation
- Other national security threats
Do sanctions checks include PEPs (Politically Exposed People)
Sanctions checks and PEPs (Politically Exposed Persons) are related, but not the same thing. A sanctions check relates to a person or entity that is on an official sanctions list such as OFAC, UN and EU. These are people or organisations that are legally restricted or blacklisted. A PEP identifies individuals who hold or have held prominent public positions, like:
- Heads of state
- Government officials
- Judges
- Military leaders
- Close associates or family members of the above
PEPs aren’t necessarily on sanctions lists, but they pose a higher risk for:
- Corruption
- Bribery
- Money laundering
How are Sanctions and PEPs connected?
Some PEPs do end up on sanctions lists, especially if they’re involved in illicit activity. That’s why many compliance service providers and systems check both at the same time.
Commonly checked sanctions lists:
- OFAC’s SDN (Specially Designated Nationals) List
- United Nations Security Council Sanctions List
- European Union Consolidated Sanctions List
- HM Treasury Sanctions List (UK)
When are sanction checks used?
They are most often used for the following reasons:
- Opening bank accounts
- Hiring new employees
- Onboarding new clients
- Making cross-border payments
- Mergers & acquisitions
Related to Lettings, here’s a more detailed breakdown:
New Reporting Obligations
Letting agents must report any knowledge or suspicion of financial sanctions breaches or designated persons (individuals or organizations subject to sanctions) to the OFSI.
“Relevant Firms” Classification
Letting agents are classified as “relevant firms” under financial sanctions regulations, which means they are subject to specific reporting obligations.
Sanctions Checks
Letting agents are now legally required to perform sanctions checks before facilitating a tenancy agreement, including verifying the identity of landlords and tenants and checking whether they appear on the UK’s financial sanctions list.
Compliance
Letting agents need to ensure their AML and sanctions policies include robust checks for designated persons or breaches of sanctions regulations, train staff to identify red flags, and establish clear reporting channels to manage OFSI reporting obligations.
No Change to AML Supervision Threshold
The threshold for registering for AML supervision remains the same, meaning that letting agents dealing with rental agreements under €10,000 still do not have to register for AML supervision.
Impact on Landlords and Tenants
Landlords and tenants should expect that letting agents need to verify their identity and check whether they appear on the UK’s financial sanctions list, which may lead to slight delays in the process of securing tenants.
Resources
The Office of Financial Sanctions Implementation (OFSI) maintains an updated list of sanctioned individuals and organizations.
Ways to perform a Sanction Check
- Use the UK Government’s Sanctions List Website: UK Sanctions List Maintained by the Foreign, Commonwealth & Development Office (FCDO). You can search or download the consolidated list of designated persons/entities subject to sanctions.
- Check the OFSI Consolidated List Website: Office of Financial Sanctions Implementation (OFSI) Run by HM Treasury, this is the official list used for financial sanctions enforcement. You can search by name, alias, or other identifiers, or download the full list in multiple formats.
- Use Commercial Sanctions Screening Tools. These offer automated screening, real-time monitoring, and enhanced due diligence features. Often used by banks, legal firms, and regulated industries.
- API Integration with Screening Services For businesses needing automated checks at scale, many services (like Refinitiv, ComplyAdvantage, or Acuris) offer API access. This allows real-time screening within onboarding systems, CRMs, or compliance software.
- Use AML/KYC Compliance Platforms Platforms like SmartSearch, NorthRow, or Creditsafe offer sanctions checks as part of broader AML (Anti-Money Laundering) or KYC (Know Your Customer) compliance tools. Often includes identity verification, PEP (Politically Exposed Person) checks, and ongoing monitoring.
