On 5 October 2018, the Office of Financial Sanctions Implementation (“OFSI“) published its first Annual Review, providing an overview of OFSI’s activities in the financial year 2017 to 2018, as well as noting its priorities for the future.
In 2017-18, OFSI received 122 reports of suspected breaches of financial sanctions, with a reported value of around £1.35 billion. OFSI uses ‘reports received’ as a first approximation snapshot of non-compliance in a given period. It is important to note that subsequent investigation may discover that some of these are not in fact breaches and the value of a suspected breach may increase or decrease as the full facts of each case are investigated. OFSI did not impose any monetary penalties for serious breaches in 2017-18 but is continuing to investigate a number of cases where a penalty may be an appropriate response. Its powers are not retrospective and apply only to cases where the offence occurred after 1 April 2017, when the law was introduced. OFSI reports that it is likely to impose monetary penalties in 2018-19, although the majority of cases, as now, will be resolved by enforcement activity short of a penalty.
OFSI issued over 50 new licences in 2017-18, the majority of which were for payment of legal fees, and nearly 100 amendments. It issued 3 authorisations and 5 amendments to authorisations over the period and has confirmed that it will continue to prioritise licence applications where it is advised of a risk of harm or a threat to life.
OFSI plans on publishing more targeted guidance in 2018-19 and will continue to ensure that stakeholders are informed of any changes to legislation over this period. The secondary legislation around the Sanctions and Anti-Money Laundering Act, which received Royal Assent in May 2018, is currently being written and stakeholder guidance will be produced in due course. Furthermore, in response to stakeholder feedback, OFSI has committed to improving the search facility in the Consolidated List in 2018-19, introducing fuzzy searches to make it easier to check for name matches. Moving forward, a key focus for OFSI will be maintaining its central role in global sanctions implementation as the UK prepares to leave the EU and developing its relationships with other competent authorities globally.
A copy of the Annual Review is available here.