The digital compliance firm says this is a “significant retreat” from last year, where 73% of these businesses upheld strict screening procedures. 

It adds: “This backslide is particularly alarming given the recent global geopolitical tensions between the West and China, echoing the lessons from last year’s sudden raft of sanctions against Russia.  

“The introduction of new sanctions could swiftly covert seemingly low-risk, longstanding UK clients into high-risk entities overnight.  

“This underscores the urgent need for robust compliance processes to avoid the substantial fines associated with a breach.” 

The firm points out that the government estimates that money laundering costs the UK economy more than £100bn each year, while the International Monetary Fund forecasts that financial crime equates to between 2% and 5% of global gross domestic product. 

The company’s study says that the legal sector, which previously led with a robust 84% commitment to always performing checks last year, has now fallen to (24% in 2023.  

The financial services sector has fallen from 66% to 22%, while checks at estate agents are down from 37% to 24%. 

SmartSearch managing director Martin Cheek says: “The backslide in this year’s data underlines a worrying theme of complacency on compliance. Sanctions are not a static list, they are a dynamic and rapidly evolving tool of foreign policy.  

“Firms that think occasional checks are sufficient are not just naïve, they’re risking severe penalties, including substantial fines. 

“Under the Economic Crime Act, breaches of financial sanctions are punishable by fines of up to £1m — and let’s not forget the accompanying reputational damage.” 

The firm’s study was carried out by data group Censuswide, which surveyed 501 compliance decision-makers across financial services, estate agents, mortgage brokers, intermediaries, accountancy and law firms between 11 September and 18 September.