The Office of Financial Sanctions Implementation (OFSI), part of HM Treasury, which is the authority for implementing financial sanctions in the UK, have published guidance to clarify how they will use their new powers to impose civil monetary penalties for sanctions breaches on a strict liability basis from Monday 15 June 2022. The full message from Director Giles Thomson is available here.
The Economic Crime (Transparency and Enforcement) Act 2022, which we recently blogged on, removed the requirement that a person must have known, suspected or believed that they were acting in breach of sanctions before significant civil penalties could be imposed. This legislative change undoubtedly makes it easier for OFSI to hand out significant fines. However, this guidance recognises that all a responsible business can do in the moment when making decisions about sanction compliance in the course of business is to base these decisions upon their knowledge or suspicion having taken reasonable steps of enquiry.
OFSI’s guidance confirms that, when deciding whether to impose a civil penalty, OFSI will take into account whether the person committing the breach knew or suspected that their conduct amounted to a breach of financial sanctions as well as the efforts they took to prevent breaches.