New OFSI financial sanctions enforcement/monetary penalties guidance and FAQs

IPA Insolvency Practitioner newsletter, May 2024

The Office of Financial Sanctions Implementation (OFSI) is the authority for financial sanctions implementation in the UK. Members will be aware that the IPA advises that a check of the OFSI consolidated list should be undertaken as part of due diligence checks to confirm that no relevant party in a proposed appointment is subject to sanctions.

The IPA also recommends your Nominated Officer (also commonly known as the MLRO) sets up an alert to obtain updates from OFSI. You can subscribe to OFSI updates here.

OFSI have published an update to their sanctions and penalty regime for breaches of financial sanctions. It remains important for IPs and Nominated Officers (also commonly known as the MLRO) to ensure that all staff are aware of the work of OFSI and to ensure that simple checks of the OFSI Consolidated List is undertaken to confirm if any relevant entity is subject to sanctions and if so, to ensure early contact is made with OFSI to ensure that there is no breach of sanctions.

A breach of sanctions can be a criminal offence with a sentence – if convicted – of up to seven years in prison. Monetary penalties can also be imposed. There is a permitted maximum of the fine of £1,000,000 or 50% of the estimated value of funds or resources subject to a breach or a maximum of £1,000,000 for any other case.

A copy of the guidance can be found here.

OFSI have additionally launched an FAQ page. These FAQs should assist with matters including dealing with OFSI and the position with cases that involve any Russian or sanctions element.