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08 August 2017

Updated guidance on financial sanctions enforcement

The Government has extended powers to act against those who don’t report information that could undermine UK financial sanctions.

All businesses, organisations, and individuals have an obligation under financial sanctions regulations to report information which facilitates compliance. However, enforcement action could only be taken against firms or people in the regulated financial services sector who failed to report.

The extended powers set out in new regulations, broaden enforcement to the following business areas from 8 August 2017:

  • auditors
  • casinos
  • dealers in precious metals or stones
  • estate agents
  • external accountants
  • independent legal professionals
  • tax advisors and
  • trust or company service providers

Prompt reporting of information is essential for financial sanctions to be an effective foreign policy and national security tool. For instance, it helps OFSI to detect breaches and identify those who evade sanctions by using different aliases.

The new regulations extend existing powers without creating new ones or changing the purpose of the law. The only change is that from 8 August these groups may commit a criminal offence if they do not report the information they should already be reporting to OFSI.

OFSI have updated the Guide to Financial Sanctions to help individuals and businesses understand what they should report and when. All impacted businesses are encouraged to review their responsibilities as non-compliance could lead to a monetary penalty or criminal prosecution.

As well as new information on reporting obligations, the updated Guide clarifies OFSI’s existing positions on organisations owned or controlled by those subject to sanctions, as well as the process for obtaining a licence.

OFSI will continue to work with industry bodies to develop its guidance so that it is responsive to what businesses, and the public and charitable sectors, need.

OFSI’s Guide to Financial Sanctions is published on OFSI’s GOV.UK pages: https://www.gov.uk/government/publications/financial-sanctions-faqs

To stay up-to-date on financial sanctions, subscribe to OFSI’s e-alert.

Alternatively, you can contact OFSI directly:

Email: OFSI@hmtreasury.gsi.gov.uk

Telephone: 020 7270 5454