UK Sanctions Agency Gaining More Enforcement Powers, Law Firm Says
Recently passed U.K. legislation gives the country’s top sanctions agency greater intelligence-gathering and enforcement powers, Crowell & Moring said in a November client alert, and could allow it to process license applications more efficiently.
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The changes, most of which take effect Dec. 5, will expand the Office of Financial Sanctions Implementation’s mandatory sanctions-related reporting rules to cover a broader set of entities, including “high-value dealers, art market participants, insolvency practitioners and letting agencies,” the firm said. It also said those entities and others will be required to report any suspected sanctions violations “regardless of whether that could amount to a criminal offence or result in civil enforcement” -- a change from the previous requirement that entities report to the government only when they suspected the violation would lead to a criminal offense.
Another change codifies an annual reporting requirement under which all U.K. people and entities must provide information about any funds they hold that are owned or controlled by a sanctioned person or company. Crowell said this change is designed to “counter the high level of non-compliance with existing requirements by providing a robust basis for OFSI to take enforcement action where persons fail to report.”
Other changes will give OFSI broader “grounds” to issue licenses for certain payments and other activities relating to insolvencies and restructuring; provide the agency with “express legal grounds” to issue licenses in cases “which do not involve a named designated asset freeze target”; give OFSI new powers to impose civil fines against people or companies that violate U.K. restrictions on buying land in Russia or certain occupied regions of Ukraine, and more.
“Collectively, these amendments will give OFSI greater teeth to monitor and enforce sanctions,” Crowell said.