In our blog of 2 June 2022, we highlighted some changes which were due to be made to the Office of Financial Sanctions Implementation’s (OFSI) powers in continued response to the Russian invasion of Ukraine. Those changes came into effect today (15 June 2022). For any breaches of financial sanctions after today, the changes are as follows:

• OFSI will be able to impose a civil penalty on a strict liability basis. This means that OFSI will not need to demonstrate that a person had knowledge or reasonable cause to suspect that they were committing an offence. The intention is to make it easier for OFSI to investigate and enforce financial sanctions breaches and brings the legal test in line with that for import and export of arms, and the US financial sanctions regime. No changes have been made to the criminal test.
• OFSI will be able to publish details of those who breach financial sanctions, even where no enforcement action is taken.
• There is more flexibility in relation to a review of OFSI’s decision to impose a monetary penalty. Reviews requested after today will be able to be undertaken by somebody other than a minister, allowing OFSI to make better use of resources. A challenge can still be brought to a Tribunal if necessary.

OFSI has updated its guidance on enforcement powers which can be found here. Its Director, Giles Thomson, has been keen to stress that the changes do not in any way alter OFSI’s approach to enforcement and that it will continue to apply its enforcement tools “robustly but fairly and proportionately”. Businesses should keep their compliance policies under review and up to date to allow them to deal with the ever-changing regulatory landscape.

Get in touch if you require compliance advice or you are concerned about a potential sanctions breach.

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