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Why are OFSI check and ongoing monitoring required?

What are the reasons and legislation that makes this a requirement?

Sanctions legal requirement: Under UK financial sanctions law (Sanctions and Anti-Money Laundering Act 2018), it's prohibited to deal with funds owned by or make funds available to designated persons and companies that are on the sanctions register.

 

OFSI legal requirement: Under The Sanctions (EU Exit) (Miscellaneous Amendments) (No.2) Regulations 2024, from 14 May 2025, letting agencies became "relevant firms" with mandatory reporting obligations to OFSI.

 

Letting Agent, Calmony & Griffin obligations: You must ensure you're not facilitating payments to or from sanctioned individuals. Since Calmony processes payments in and out of your Griffin Bank account, we all share responsibility for compliance.

 

The consequence: FINE: Breaching sanctions by facilitating a payment in or out means you, Calmony or Griffin can face a penalty of £1 million, even without knowledge of a breach.

 

The consequence: CRIMINAL CONVICTION: Breaching UK financial sanctions is a criminal offence under the Sanctions and Anti-Money Laundering Act 2018. This carries a maximum penalty of up to 7 years Imprisonment (which may also result in director disqualification).

 

Why does Calmony require daily monitoring?

We are an FCA-registered company that process live payment flows through your account, and without daily screening, you, Calmony and Griffin risk:

  • Processing payments to sanctioned individuals or companies
  • Accepting deposits from sanctioned individuals or companies

Under UK financial sanctions law, it is prohibited to deal with funds belonging to sanctioned individuals or companies. Since you cannot determine compliance without checking who you're paying or receiving money from, screening is legally required.

Daily monitoring is therefore a contractual requirement to ensure Calmony, you, and Griffin Bank comply with the Sanctions and Anti-Money Laundering Act 2018 and The Sanctions (EU Exit) (Miscellaneous Amendments) (No.2) Regulations 2024.

 

Why does Calmony check every 24 hours?

Individuals can be added to the UK Sanctions List at any time, and the register is updated daily. This is why we screen every 24 hours, someone compliant today could be designated tomorrow, and continued transactions would be illegal.

 

Why check the account holder paying in, not just tenants?

Anyone can pay into an account, including:

  • Parents paying on behalf of students
  • Guarantors
  • Third-party companies
  • Friends or relatives

Even if the tenant is monitored, the payer could be sanctioned. We must check every party to the transaction because the prohibition applies to "making funds available to or for the benefit of" designated sanctioned individuals or companies.

 

Why don't referencing companies need this?

Referencing companies provide information services. They don't:

  • Hold client money
  • Process payments out
  • Receive payments in

Calmony and Griffin Bank handle actual money movement in a client bank account. This triggers the asset freeze prohibitions that referencing companies don't face.

 

Why don't some banks do daily screening?

Many banks rely on:

  1. Transaction monitoring systems that flag suspicious activity
  2. Customer responsibility to ensure their own compliance

While they expect you to continually monitor your transactions, once they detect a suspected sanctions match, banks often freeze and close accounts immediately to eliminate their risk exposure.

 

What's different about Calmony and Griffin Bank?

We rely on active monitoring with daily screening as part of the service. Unlike high street banks that rely on reactive monitoring and typically freeze or close accounts when issues arise, we identify potential matches before transactions complete.

This approach ensures continuous compliance whilst allowing your business to operate without sudden account closures. It protects you, your landlords, Calmony, and Griffin from prosecution, fines up to £1 million, potential director disqualification, criminal conviction, and up to 7 years imprisonment.

 

What happens if there's a match?

If we identify a potential sanctions match:

  1. We'll notify you immediately
  2. You must verify the match against the full sanctions list entry
  3. If it's a "true match," you must report to OFSI and freeze relevant funds. For OFSI reporting or queries: ofsi@hmtreasury.gov.uk
  4. If it's a false positive, document your reasoning

 

Strict Liability Applies: Since 15 June 2022, UK sanctions breaches are strict liability offences. You can be penalised even if you didn't know someone was sanctioned. "I didn't know" is not a legal defence.