Licences from OFSI

IPA Insolvency Practitioner newsletter AML Digest, April 2023

Contents

• David Holland, Chief Inspector and IPA Money Laundering Reporting Officer
• High-risk countries for money laundering purposes: Enhanced Due Diligence
• Proliferation Financing
• Ongoing monitoring of AML matters in an appointment
• SAR reporting
• Insolvency Practitioner identity fraud and scam websites
• Reporting misuse of bounce back loans
• NCA Amber Alert: High Net Worth Individuals and Tax Evasion (member login required to view)
• AASG alerts (member login required to view)
• Regulation 18 risk assessment reviews
• Reporting of material discrepancies of Companies House records
• Economic Crime Levy
• OPBAS Sourcebook
• How the 2017 Money Laundering Regulations have evolved
• ISS AML training
• OFSI webinar

Members will be aware of the increasing risks from dealing with sanctioned individuals due to the Russian invasion of Ukraine in 2022. The IPA has advised that, if there are any doubts, to check the OFSI (Office of Financial Sanctions Implementation) sanctions list, which can be viewed here. OFSI is part of HM Treasury and its remit is to ‘ensure that financial sanctions are properly understood, implemented and enforced in the UK.’

The basic rule for any entity (individual or corporate entity) subject to an asset freeze is that you cannot deal with the assets under the freezing order. If you do, you will have breached the sanction.

However, OFSI can provide a specific licence to enable IPs to deal with such assets/estates. A licence provides permission to carry out an act – usually to dispose of an asset, or distribute funds in an estate – that would otherwise be prohibited.

OFSI are clear that a licence will often include specific permissions and conditions attached to the licence provided and the permission provides the parameters of what has been approved. It does not mean you have to take the action, but that you have the permission for a specific activity.

Applications for licences must be made and submitted to OFSI. The IPA is not responsible for applying for a licence and has no authority to approve or reject an application. It is vitally important that your Regulation 18 firm risk assessment notes that any high-risk case where there is, or there is a potential for, dealings with a sanctioned entity, the matter is immediately brought to the attention of the appointed IP(s) and the firm’s MLRO, and that no action is taken until the position on any sanctions and a licence application is made to OFSI and is approved by OFSI. Getting this wrong and dealing with sanctioned assets/entities can lead to financial penalties and/or custodial sentences of up to a maximum of seven years’ imprisonment. OFSI have a number of helpful guidance documents and information on the sanctions regime and how to apply for a licence. This link will take you to the OFSI ‘Introduction to Licensing’ page, and there are links in their introductory page to further specific guidance on licence applications.