On October 17, 2022, the UK HM Treasury’s Office of Financial Sanctions Implementation (“OFSI”) and the US Treasury Department’s Office of Foreign Assets Control (“OFAC”) issued a joint statement (OFSI statement here, OFAC statement here) to reiterate the close working relationship between the two agencies, explaining the rationale behind increased OFSI-OFAC co-operation and how this will manifest in practice. The statement follows a technical exchange attended by OFAC and OFSI in London, which concluded on 13 October 2022.
Rationale for increased co-operation
The joint statement highlights the common ground between the two organisations (focusing on structure, functionality and tools), stating that increased co-operation will facilitate effective sanctions implementation as well as helping to boost the organisational capabilities of both OFSI and OFAC. The statement also emphasises the importance of financial sanctions in supporting the foreign policy and national security aims of the United States and United Kingdom, whilst recognising that the growing scale of such sanctions has increased the complexities in their implementation.
Increased co-operation in practice
The joint statement outlines that such co-operation will build on the existing collaboration between OFSI and OFAC (for example, in the context of addressing shared priorities including cyber threats and the misuse of virtual assets). Therefore, as part of this increased coordination, OFSI and OFAC shall continue to exchange best practices and strengthen their working relationship. The joint statement specifies that OFAC and OFSI officials working on implementation and enforcement will be further exchanging best practices and strengthening working relationships at all levels. The statement makes clear that collaboration is expected not only in relation to the sanctions imposed in response to Russia’s invasion of Ukraine, but also across other common sanctions regimes. The statement also envisages wider collaboration with additional allies and partners on a global scale, with a view to maximising the desired effect of the sanctions, minimizing unintended consequences, and easing the burden of compliance for business.