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The Office of Financial Sanctions Implementation (OFSI) has recently announced that it is consulting on its draft guidance on the process for imposing monetary penalties for breaches of financial sanctions.

The guidance relates to the new civil powers in the Policing and Crime Bill (the “Bill“), The Bill, which is currently going through Parliament, will change the legal framework for enforcing the financial sanctions regulations. In particular, it will create a monetary penalty regime, enabling HM Treasury to issue penalties under civil law.

OFSI’s guidance will set out the circumstances in which a monetary penalty will be suitable. It will also explain how the amount of the penalties will be set.

A draft version of the guidance has been made available for review as part of the consultation. The draft includes guidance on the following: OFSI’s compliance and enforcement approach, its case assessment process, the procedure for imposing a penalty, the process for Ministerial Review, and the publication of civil penalties.

OFSI’s consultation document asks for responses to the following questions:

  1. Do the introductory sections give you enough information to understand the scope of the law on monetary penalties? What else would be useful?
  2. What are your views on OFSI’s compliance and enforcement approach?
  3. Is there anything else you would expect a compliance model to tackle?
  4. Do you understand our proposed case assessment approach?
  5. What are your views on out proposed case assessment approach?
  6. Does this guidance give you enough information to help you understand how a penalty is calculated?
  7. OFSI will reduce the level of penalty if there is voluntary disclosure. What are your views on OFSI’s approach to this?
  8. Is the process for imposing a penalty and making representations clear from this guidance?
  9. Do you understand the guidance on seeking a Ministerial review?
  10. What are your views on the process for seeking a Ministerial review?
  11. Does this guidance clearly explain why and how OFSI will publish information on penalties imposed for breaches of financial sanctions regulations? What are your views on the level of information OSFI will publish?
  12. Considering the document as a whole, does this guidance help you clearly understand OFSI’s approach to imposing monetary penalties?

The consultation runs from 1 December 2016 to 26 January 2017. Before publishing the final guidance, OFSI will publish a consultation response document, which will include: a list of the persons and/or institutions who provided responses to the consultation, summarised responses to each question, whether or not OFSI agrees with the responses to each question, and whether or not OFSI has amended the guidance in light of the responses.

The OFSI consultation document can be found here.


Ross Denton is a partner in Baker McKenzie’s European Community, Competition & Trade Department in London and member of the Baker McKenzie Japanese Practice Group. He also served as coordinator of the Firm’s International Trade & WTO Practice Group. Ross routinely advises US and Japanese multinationals on EU and UK competition matters and international trade law issues. In addition to his practice, Ross contributes to a number of publications, including Laws of the European Communities and Encyclopedia of Information Technology. He is a member of the UK Customs Practitioners Group and the World Trade Lawyers Association.