UK enforcement and monetary penalties for breaches of financial sanctions
#law
The Office of Financial Sanctions Implementation (OFSI) enforces financial sanctions and punishes breaches with monetary penalties. Financial sanctions can be used to limit certain activities and protect assets. They can involve asset freezes, restrictions on financial markets and services, and directions to stop doing business with certain individuals or groups. If a company breaks financial sanctions regulations, OFSI can impose monetary penalties on individuals and organizations. Reporting obligations apply to relevant firms, and failure to comply is an offense. Officers have separate appeal rights. OFSI may also impose monetary penalties on one person while another may be prosecuted criminally.
How this works
OFSI will determine the monetary penalty for a breach, which may be up to £1 million or 50% of the value of the breach, whichever is greater.
The penalty will be based on the seriousness of the case and will be reasonable and proportionate, meaning that an ordinary reasonable person would view the penalty as appropriate and that there is a relationship between the value of the penalty and other factors in the case.
The penalty matrix allows for reductions of up to 50% for voluntary disclosure, and the level of reduction will depend on the severity of the breach. In cases where only some breaches are disclosed voluntarily, this will be considered when determining any reduction.
The penalty process follows this approach:
More details are here: https://www.gov.uk/government/collections/enforcement-of-financial-sanctions
The Office of Financial Sanctions Implementation (OFSI) enforces financial sanctions and punishes breaches with monetary penalties. Financial sanctions can be used to limit certain activities and protect assets. They can involve asset freezes, restrictions on financial markets and services, and directions to stop doing business with certain individuals or groups. If a company breaks financial sanctions regulations, OFSI can impose monetary penalties on individuals and organizations. Reporting obligations apply to relevant firms, and failure to comply is an offense. Officers have separate appeal rights. OFSI may also impose monetary penalties on one person while another may be prosecuted criminally.
How this works
OFSI will determine the monetary penalty for a breach, which may be up to £1 million or 50% of the value of the breach, whichever is greater.
The penalty will be based on the seriousness of the case and will be reasonable and proportionate, meaning that an ordinary reasonable person would view the penalty as appropriate and that there is a relationship between the value of the penalty and other factors in the case.
The penalty matrix allows for reductions of up to 50% for voluntary disclosure, and the level of reduction will depend on the severity of the breach. In cases where only some breaches are disclosed voluntarily, this will be considered when determining any reduction.
The penalty process follows this approach:
- determine the estimated value of the transactions which breach the regulations
- determine the monetary penalty: this is up to £1 million or 50% of the estimated value of the breach, whichever is higher
- apply the seriousness determination: either 'serious' or 'most serious', depending on the facts
- determine the baseline: this is also based on the facts of the case and what level of monetary penalty under the relevant maximum would be reasonable and proportionate
- determine if a reduction applies: if so, determine an appropriate percentage reduction and apply it to the baseline
More details are here: https://www.gov.uk/government/collections/enforcement-of-financial-sanctions
