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Office of Financial Sanctions Implementation – Updates to OFSI Enforcement Guidance
March 21, 2023

 1. Introduction

The Office of Financial Sanctions Implementation (OFSI) has recently released an announcement with updates to its Enforcement and Monetary Penalty guidance to include details on its approach to assessing breaches of financial sanctions where an incorrect assessment of ownership and control of an entity is relevant to the commission of the breach.

This updated guidance sets out examples and a principles-based approach for conducting due diligence and making assessments. To view OFSI Enforcement and Monetary Penalty Guidance, click here.

 

 2. What are Sanctions?

All firms are subject to the sanctions regime, regardless of the types of services they offer. The Solicitors Regulation Authority provides various guidance notes for firms to follow and only recently released updated information to help firms understand their obligations and how to comply with them.  You can read the SRAs guidance notes here: Complying with the UK Sanctions Regime

Sanctions are restrictive measures imposed by the government to achieve a specific foreign policy or national security objective. Sanctioned individuals, entities, planes, or ships are referred to as ‘designated persons.’ The regulator’s guidance is primarily focused on the financial sanctions regime (which aims to prevent money flows to and from designated persons), although it does in places address some of the other kinds of sanctions too.

A breach of UK sanctions is a criminal offence and is punishable by a fine and/or imprisonment.

The UK may impose the following types of sanctions measures:

  • financial sanctions, including asset freezes, administered by the OFSI
  • trade sanctions, including arms embargoes and other trade restrictions, administered by the Department for International Trade (DIT)
  • immigration sanctions, barring entry to the country, administered by the Home Office
  • transport sanctions (divided into aircraft and shipping sanctions), including de-registering or controlling the movement of aircraft and ships, often preventing them from docking in UK ports or landing in UK airports, administered by the Department for Transport (DfT)

The financial sanctions regime is rooted in several pieces of legislation, including the Sanctions and Anti-Money Laundering Act 2018 (SAMLA), which allows government to amend the regime via secondary legislation. These are updated regularly here:

https://www.legislation.gov.uk/uksi/sanctions

 

 3. Ensuring Your Staff Understand Their Obligations

Due to the level of regulation that applies to law firms, their management and supervision, setting out how a firm operates, including the conduct expectations of staff, in a series of policies, procedures, and documents is essential for all law firms. Furthermore, training all your staff on the firm’s policies and procedures and regulatory obligations is vital. Once training has been provided, be sure this is recorded as proof and that staff have easy access to policies and support from managers or the firm, especially for remote workers who are distanced from the traditional office environment.

TSP provides this as part of our standard compliance product referred to below.

 

 4. Regulatory Guidance and Support from Industry Experts

If you would like guidance on how your firm should consider staff training and how to approach policies and procedures, including those financial sanctions and designated persons, or you simply wish to confirm your firm is achieving the required standard, at The Strategic Partner, we offer a range of solutions which include: –

  • Review – A review of the firm’s approach to regulation and compliance to include all regulatory requirements and AML procedures. The output of this provides the firm with a written gap analysis and solutions to remedy any issues.
  • Training – Whether you seek training on a 1-2-1 or group basis, The Strategic Partner has a range of training courses and mentoring programmes to suit any firm. We can also design any additional bespoke courses that you need. We have provided training to firms of all sizes, and our clients range from sole practitioners through to multi-office, multi-service firms with overseas offices.
  • Auditing– Procedural, staff, systems, and files to ensure the procedures are up to the required standard and being implemented at case level with a report of the outcome.

Solutions – Implementation of robust solutions to ensure the firm achieves compliance and then maintains compliance through the provision of ongoing support and assistance: –

For more information on The Strategic Partner and to discuss how we may be able to assist in accelerating your risk management or compliance and regulation or simply to keep this up to date you can call us on 020 3911 9710 or email us info@thestrategicpartner.co.uk. 

 

You can view and download the PDF of this article here.

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