UK: New OFSI Monetary Penalty Guidance – applicable from 1 April 2021

On 10 March 2021, the Government published new guidance on the government processes on the issue of monetary penalties for breaches of financial sanctions (see here). This guidance applies from 1 April 2021 and from this date will replace the April 2018 guidance (see our previous blog post on this guidance here). In the interim, the current guidance will remain applicable.

The updated guidance incorporates some of the lessons learned through OFSI’s monetary penalty cases since April 2018 and where necessary, it clarifies OFSI’s position.

While the overall penalties regime has not changed, there are a number of smaller changes to the guidance that indicate that OFSI is taking a stronger enforcement stance.

For example, some notable changes include:

• Removal of the statement that “OFSI will not normally impose a penalty on any person who has already been prosecuted.” (paragraph 1.22)
• Removal of the statement that OFSI will “not artificially bring something within UK authority that does not naturally come under it” (paragraph 3.8)
• Various changes to knowledge thresholds and the level of compliance expected; in particular, note the deletion of paragraph 3.22 (paragraphs 3.19 – 3.22)
• OFSI has changed the description of “most serious” type cases to refer to “particularly poor, negligent or intentional conduct” instead of “blatant flouting of the law” (paragraph 3.46).
• The penalties imposed by OFSI are no longer required to be clearly related to the value of the breach (paragraph 4.8)
• Removal of the section on “Discretion not to impose a penalty” (paragraph 4.19)

Paragraph references refer to the current guidance.