May 22, 2018: HMT launches new reporting form

 

Guidance

Reporting information to OFSI – what to do

If you suspect that a breach of financial sanctions has occurred, you need to contact OFSI at the earliest opportunity.

You are legally obliged to report to OFSI if, as a relevant institution, business or profession, you know or suspect that a breach of financial sanctions has occurred, that a person is a designated person, or you hold frozen assets and that knowledge or suspicion came to you while conducting your business. You must contact OFSI at the earliest opportunity.

EU regulations require individuals, entities and bodies to supply OFSI as soon as practicable with any information that would ‘facilitate compliance’ with the regulations. Any information provided will only be used for the purposes for which it was provided or received. This requirement applies to natural and legal persons, entities and bodies in the UK or under UK jurisdiction.

UK regulations, which enforce EU regulations, set out additional specific reporting obligations for a ‘relevant institution’ and a ‘relevant business or profession’. All relevant institutions, businesses and professions are required, under UK law, to report information about designated persons, frozen assets or suspected breaches to OFSI if the information on which the knowledge or suspicion is based came to it in the course of carrying on its business. These reports are essential to help OFSI detect and address illegal activity.

Relevant institutions, businesses or professions

The following are generally, considered ‘relevant institutions, businesses or professions’ under financial sanctions legislation:

  • financial institutions
  • auditors
  • casinos
  • dealers in precious metals or stones
  • estate agents
  • external accountants
  • independent legal professionals
  • tax advisers
  • trust or company service providers

You can review OFSI’s general guidance for more information on reporting obligations.

How to report to OFSI

The Compliance Reporting Form provides details on what information is required for each section. Information provided as part of this disclosure may be disclosed to third parties for the purpose of facilitating or ensuring compliance with the relevant EU Regulation and in compliance with data protection legislation. Please email this form, including any associated documents, to ofsi@hmtreasury.gov.uk. You should include “Suspected breach”, “Suspected designated person” or “Frozen assets” in the subject line of your email, whichever is most applicable.

For more information and guidance on financial sanctions, please visit our guidance page. You can also contact OFSI by phone on 020 7270 5454 (Mon-Fri, 09:00-17:00).

What is a designated person?

A designated person is an individual, entity or body, listed under EU or UK legislation as being subject to financial sanctions.

The list of designated persons can be found on OFSI’s consolidated list of asset freeze targets.

Financial sanctions also apply to persons and/or entities which are owned or controlled by a designated person, whether directly or indirectly. They may not be designated in their own right, so their name may not appear on the consolidated list. However, those persons or entities are similarly subject to financial sanctions.

For more information on ownership and control see OFSI’s general guidance.

Your report should include information by which a designated person can be identified. For example, aliases or alternative identities that could be used to evade sanctions.

How do I report frozen assets?

Financial sanctions legislation requires that all funds or economic resources belonging to, owned, held or controlled by a designated person must be frozen.

Under this legislation, OFSI can request such information as it may reasonably require and that you may possess, for the purpose of, amongst other things, monitoring compliance with or detecting evasion of the legislation.

Every year OFSI carries out a Frozen Assets Reporting exercise that requires everyone in or resident in the United Kingdom who holds or controls funds or economic resources belonging to, owned, held, or controlled by a designated person, to provide a report with the details of these assets.

On receipt of these reports, OFSI carries out an annual review to update its records to reflect any changes to these assets during the reporting period.

However, if you freeze any assets outside of this review period you must contact OFSI as soon as possible, using the form attached to report what frozen assets you hold.

What is a breach?

If you do something which is prohibited by financial sanctions and, at the time you did so, you knew or had reasonable cause to suspect that the act was prohibited, you will have breached financial sanctions and may face criminal prosecution or a monetary penalty.

OFSI works with relevant law enforcement agencies and regulators to consider all suspected breach cases that are reported.

Financial sanctions are widely publicised and businesses, particularly those operating internationally, should routinely consider whether sanctions might affect their transactions. These organisations will not be able to avoid liability simply by failing to consider their sanctions risks.

You should report suspected breaches to OFSI as soon as you become aware of them. Reporting breaches protects the integrity of sanctions and assists government and law enforcement agencies in tackling serious crime.

Consequences of breaching financial sanctions

When deciding how to respond to a breach, OFSI and the relevant enforcement agencies and regulators will take several factors into account. These include but are not limited to the following:

  • the timeliness with which the breach was disclosed

  • whether it was self-disclosed

  • the level of cooperation with any investigation

  • actions taken to improve future compliance

Where a breach has occurred, OFSI may decide to issue a warning letter to the involved parties and request evidence of actions taken to improve future compliance.

OFSI may also refer cases to the appropriate regulators and enforcement agencies who may then decide whether to pursue a prosecution or regulatory action. OFSI is also able to impose monetary penalties in cases where serious breaches of financial sanctions occur. This provides alternative enforcement action to warning letters and criminal prosecution.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Links:

HMT/OFSI Notice

Compliance Reporting Form

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