HMT/OFSI’s enforcement guidelines: Case factors


Case factors

3.15 OFSI will take several factors into account that will aggravate or mitigate when determining the facts and how seriously OFSI view a case. These include the following:

Direct provision of funds or economic resources to a designated person

3.16 Individuals subject to financial sanctions should be aware that financial sanctions apply to them. To enable others to know which individuals and companies are targets of financial sanctions, OFSI maintains a consolidated list of persons to whom financial sanctions apply. The list enables anyone to know whether an individual they are dealing with is a designated person. We are likely to treat a case that directly and openly involves a designated person more seriously than one that is a breach of financial sanctions but does not make funds or economic resources available to a designated person. 


Circumvention of sanctions

3.17 A person will usually also commit an offence when they intentionally participate in activities knowing that the object or effect of them is (directly or indirectly):

  • to circumvent any of the prohibitions, or

  • to enable or facilitate the contravention of any such prohibition or requirement

    OFSI takes circumvention very seriously because it attacks the integrity of the financial system and damages public confidence in the foreign policy and national security objectives that the sanctions regimes support. We will normally impose a monetary penalty if the case is not prosecuted criminally.

    Value of the breach

    3.18 OFSI will consider the value of the breach (which may be estimated). A high-value breach is generally more likely to result in enforcement action. However, OFSI realises there are circumstances involving lower-value breaches where enforcement action is also justified – for example, if the action was a calculated and deliberate flouting of sanctions.

    Harm or risk of harm to the sanction regime’s objectives

    3.19 We will make an assessment of the harm, or the risk of harm, done to the sanction regime’s objectives. Those objectives are set out in the relevant regulation, which describes what activities the regime aims to prevent or encourage – for example, to guard against nuclear proliferation. The greater the risk of harm to the regime’s objectives, the more seriously we are likely to regard a case.

    Knowledge of sanctions and compliance systems

    3.20 Everyone must ensure they follow the law, and ignorance of the law is no defence. But it is also true that some businesses have more in-depth knowledge of sanctions and better- developed compliance systems and processes than others, because of the kind of work they do. Businesses should make their own assessment of what is reasonable and necessary for their particular circumstances. When we consider a case, we believe it is reasonable to take account of the level of actual or expected knowledge and the extent of relevant ways of complying.

    3.21 Regulated professionals should meet regulatory and professional standards. We may consider their failure to do so an aggravating factor.

    3.22 We wish to encourage strong compliance cultures. If a person or entity simply falls below a high standard, we will consider whether or not it is proportionate to impose a penalty if that is the only distinguishing factor in a case. This is particularly true when the company has acted swiftly to remedy the cause of the breach. However, we may still impose a penalty if other factors are stronger. 

  1. Behaviour

    3.23 We will consider how each party in a case has behaved. Individuals may display different behaviour over time and several types of behaviour in a particular case. We have divided behaviours into several broad categories that we believe reflect compliance in the financial sanctions regime. Doing so enables us to ensure we respond appropriately to similar behaviour in different situations.

    3.24 We will consider, for example, whether the breach seems to be deliberate; whether there is evidence of neglect or a failure to take reasonable care; whether there has been a systems and control failure or an incorrect legal interpretation; whether the person seems unaware of their responsibilities; or whether there has simply been a mistake.

    3.25 It is possible for a mistake to cause a breach of financial sanctions legislation, for example making funds available to a designated person. Without the knowledge that the action would be a breach or any reasonable cause to suspect this, the matter would not meet the legal standard for a penalty.

    Failure to apply for a licence; breach of licence terms

    3.26 We license certain uses of frozen funds under derogations present in the financial sanctions legislation. It is prohibited to do things that require a licence without one. Once we have given a licence, monetary penalties may also apply to breaches of licence conditions.

    Professional facilitation

    3.27 Facilitation of a financial sanctions breach is a form of circumvention (see paragraph 3.17). Individuals who act on behalf of or provide advice to others as part of their job may be considered professional facilitators. They should ensure they act within the law while representing their client. Simply discovering a potential breach when acting for a client does not automatically make a professional facilitator party to it, but they may become so if their subsequent actions amount to collusion in the breach. Potential breaches should be reported to OFSI.

    Repeated, persistent or extended breaches

    3.28 Repeated, persistent or extended breaches by the same person will tend to result in us taking more serious action. This is particularly true when the individual seems unresponsive to or seems to ignore what we tell them and makes further breaches of financial sanctions. We will also tend to view multiple breaches extended over time as being more serious in total, even if they are individually of low value or relative seriousness.