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United Kingdom: Important changes to OFSI’s enforcement powers come into force from 15 June 2022

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What are the main changes:

  • For breaches of financial sanctions that are committed after 15 June 2022, OFSI will be able to impose civil monetary penalties on a strict civil liability basis. This means that going forward OFSI will not have to prove that a person had knowledge or reasonable cause to suspect that they were in breach of financial sanctions. OFSI will continue to have the burden of proving that the financial sanctions breach occurred.
  • There will be greater flexibility on challenging OFSI’s decisions to issue monetary penalties for sanctions violations. This means that reviews of OFSI’s decisions requested after 15 June 2022 may now be undertaken by someone other than a minister. This change does not in any way change or weaken the ability to further challenge OFSI’s monetary penalties at the Upper Tribunal.
  • OFSI will now have the power to publicise details of financial sanctions breaches in cases where a breach has been found, but it has not imposed a monetary penalty. In such instances, OFSI will consider publication on a case-by-case basis and will notify persons prior to publication to provide an opportunity to make representations. This applies to financial sanctions breaches committed after 15 June 2022.

These changes are introduced by the SI 2022/638 – The Economic Crime (Transparency and Enforcement) Act 2022 (Commencement No. 2 and Saving Provision) Regulations 2022.

OFSI has updated its monetary penalties guidance to reflect these changes. The updated guidance applies to sanctions breaches where the potential breach took place on or after 00:00 15 June 2022.

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Sunny Mann is a Partner in Baker McKenzie's London office and co-leads the UK Compliance and Investigations Practice, as well as the UK International Commercial and Trade Practice. Both these practices are ranked Tier 1 by Legal 500 UK. He has also worked in our Firm's Washington DC, New York and Sydney offices. Sunny also advises many clients on risk matters in India. He advises clients (including numerous FTSE 100 and Fortune 100 businesses) on compliance and investigations with respect to export controls, trade sanctions and anti-bribery rules. The Legal 500 ranked Sunny as a “Leading Practitioner", and as "excellent", with a ‘calm’ and "very practical" approach. The India Business Law Journal also noted that Sunny is "excellent and has deep experience in India". He is a Visiting Professor at the College of Europe, the leading institute for post-graduate European studies, where he teaches a course on Corporate Compliance.

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Tristan Grimmer is a partner in Baker McKenzie's London office. He is a member of the Compliance & Investigations and the International Trade and Competition practice groups. Tristan joined the Firm as a trainee in March 2004, qualifying in March 2006. He has advised on parallel investigations by authorities in the United States, Switzerland, Brazil, Japan, and has spent time working in Baker McKenzie's Chicago office. Tristan was recently named as a "Next Generation Lawyer" in the UK Legal 500 2017 directory.

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Ben Smith is a Partner in Baker McKenzie’s London office and a member of the firm’s Compliance & Investigations and International Trade practice groups. Both these practices are ranked Tier 1 by Legal 500 UK. Ben joined the London office of Baker & McKenzie in September 2007. He has also worked in Baker McKenzie's San Francisco and Brussels offices, as well as on secondment to the legal and compliance teams at three FTSE 100 UK plcs. The Legal 500 UK ranked Ben as a “Rising Star”, noting “Ben Smith is a pleasure to work with. Professional, knowledgeable and always ready to assist with practical solutions.”

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Dimitris Mourkas is a Knowledge Lawyer in Baker McKenzie, London office.

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