From June 15, 2022, important changes to the Office of Financial Sanctions Implementation’s (OFSI) enforcement powers come into force. These were highlighted in our 2022 Compliance and Regulatory Update.
In advance of these changes coming into force OFSI has just published new guidance on its enforcement powers and the monetary penalties for breaches of financial sanctions. This can be found here.
For breaches of financial sanctions that are committed after 15 June 2022, OFSI will now be able to impose civil monetary penalties on a strict civil liability basis.
The previous statutory requirement for OFSI to prove that a person had knowledge or reasonable cause to suspect that they were in breach of financial sanctions will be removed.
The amended legislation now expressly provides that:
“… [t]he Treasury may impose a monetary penalty on a person if it is satisfied, on the balance of probabilities, that … the person has breached a prohibition, or failed to comply with an obligation, that is imposed by or under financial sanctions legislation …” and that for the purposes of imposing a monetary penalty “… whether a person has breached a prohibition, or failed to comply with an obligation, imposed by or under financial sanctions legislation, any requirement imposed by or under that legislation for the person to have known, suspected or believed any matter is to be ignored. …” (our underlining).
As a result, the test for OFSI to impose monetary penalties has now been significantly reduced.
