The Office for Financial Sanctions Implementation (OFSI) has provided updates to its enforcement guidance which came into effect on 15 June 2022. This update came following the passing of the Economic Crime (Transparency and Enforcement) Act 2022, which was enacted to prevent money laundering in the property market and partly because of the invasion of Ukraine and the subsequent sanctions imposed on Russia. One of the Act’s objectives was to assist the government with seizing assets belonging to sanctioned individuals.

The new guidance contained in the updated Enforcement guide is as follows:

  • There is now a strict civil liability test for the OFSI to impose monetary penalties. In previous guidance, if a party did not know and did not have reasonable cause to suspect they were in breach of financial sanctions, a monetary penalty would not be imposed. This is now not the case, and knowledge is no longer considered in deciding whether a party has breached financial sanctions.
  • There are changes to the review of monetary penalties within the guidance. However, there is still a heavy emphasis on the importance of self-disclosure as a potential mitigating factor and the severity of the breach determining the monetary penalty.
  • The OFSI now can publish the details of breaches where a monetary penalty has not been imposed. The purpose of this new power is to give details to the public where for example, there are valuable compliance lessons for a certain industry. The details can include the party which committed the breach, a summary of the facts, the GBP value of the breach and compliance lessons that the OFSI wishes to highlight. This can be helpful to the public in general to ensure people do not breach sanctions unwittingly.

It is extremely important to be aware of these changes so that parties do not fall foul of any investigation of the OFSI.

If you or your company need any advice in relation to sanctions, Rosenblatt has a wealth of experience in financial crime and is uniquely placed to support and advise clients on how to navigate such issues.

Should you wish to discuss the services we offer further please contact Anil Rajani at anil.rajani@rosenblatt.co.uk and Ben Siskind at ben.siskind@rosenblatt.co.uk.

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