Her Majesty’s Treasury has issued an additional guidance document about sanctions compliance and enforcement, this time for importers and exporters. Here is some of the guidance specific to import/export:
1. Do I need an OFSI licence if I already have an export or trade control licence?
You may do. The Export Control Joint Unit (ECJU) issues licences for strategic goods. OFSI issues licences that permit financial transactions with a designated person that, otherwise, would be prohibited.
Having an export or trade control licence is no guarantee that an OFSI licence will be granted. To apply for an OFSI licence:
• use the application form on our website
• apply for the licence well before you need it
• identify the appropriate licensing grounds
• provide a full description of the payment chain.
Licences cannot be issued retrospectively. If you have carried out an act that required a licence without having obtained one beforehand, you may have breached financial sanctions and you should contact OFSI immediately.
2. What OFSI licensing grounds may apply to importers and exporters?
If you’re importing from or exporting to a designated person, you will need to apply for an OFSI licence. An OFSI licence is a written authorisation that permits an otherwise prohibited financial activity. You may want to check that your bank will allow the transaction before entering into a contract.
Potential licence grounds for importers or exporters include existing obligations under a prior contract – a contract that existed before the individual or entity was designated under financial sanctions legislation.
You should check if your activity is exempt. Specific exemptions are contained in financial sanctions regulations. These apply automatically in defined circumstances and do not require a licence. These could include provision of goods for humanitarian purposes.
For more information about licensing grounds and details on how to apply for a licence please refer to the ‘exemptions and licensing’ section in our general guidance.
3. Does it make a difference if my goods are for humanitarian, medical or diplomatic purposes?
You need to consider carefully the restrictions in place against the designated person or company. For example, if a person is subject to financial sanctions under the Syrian regime, you need to look at the regulation that underpins that regime.
Some regimes have exemptions or licensing grounds for the provision of goods or funds for humanitarian, medical or diplomatic purposes. OFSI seeks to process applications for licences where there is a risk to life as a priority.
Financial sanctions along the export chain1. Should I be checking other parties involved in import/export activities and related financial transactions, such as vessels, airlines, road hauliers, banks and insurers?Vessels, airlines, road hauliers, banks and insurers could be subject to financial sanctions. You may require an OFSI licence if:• payments are coming from or through a designated person, such as a listed bank, and there is no exemption in the relevant regulation• any goods are being transported by a designated person.• If you are forwarding goods to a third party, you could be making funds or economic resources available – directly or indirectly – to a designated person.2. Do financial sanctions apply to import and export agents?Yes. Agents such as couriers, express operators and freight forwarders are responsible for their own due diligence.If you find that you have funds or economic resources in your possession that belong to a designated person, you must freeze them. You mustn’t make funds available to or for the benefit of a designated person unless:
• there is an exemption in the relevant financial sanctions regulation you can rely on, or• you have a licence from OFSI.3. As a shipper, do I need to considerfinancial sanctions?If you’re transporting goods supplied by or going to a designated person, you could be in breach of financial sanctions.Ports can also be subject to financial sanctions and two ports are on the consolidated list as of April 2018: Sevastopol and Kerch. If you pay any fees to these ports, you could be in breach of financial sanctions.4. Do financial sanctions apply to port or landings fees?Financial sanctions can apply to port or landing fees if the port or shipping company is on the consolidated list or is owned or controlled by a designated person.Several ships have been added to the consolidated list as part of sanctions against North Korea. Other ships which are flagged from non-sanctioned regimes have also been designated. For example:• Nadine, formerly Capricorn, (IMO 8900878) now has a Palau flag but is listed under Libyan sanctions• Lynn S (IMO 8706349) has a flag from Saint Vincent and the Grenadines but is also listed under Libyan sanctions (April 2018).A port that accepts fees from these ships could be in breach of financial sanctions.5. Do financial sanctions apply to bills of lading?A bill of lading is issued by a ship owner to acknowledge the receipt of a cargo for transportation to a specified destination. Bills of lading are classified as ‘funds’ for the purposes of financial sanctions. If you know or suspect that you have a bill of lading that belongs to a designated person, you must freeze it, and not deal with it or make it available to a designated person (or for their benefit) in the absence of a licence or exemption.