A belated Happy New Year. I wanted to write this blog as an opportunity to introduce myself and talk a bit about OFSI in 2021.
I took over as OFSI Director from Rena Lalgie last November. For the 5 previous years, I have been responsible for anti-money laundering (AML), counter-terrorism financing (CTF) and sanctions policy in HMT and head of the UK Delegation to the Financial Action Task Force (FATF). While some aspects of OFSI’s work are newer to me, this has provided me with extensive experience of sanctions and a deep understanding of the broader economic crime agenda.
In recognition of the growing importance of tackling economic crime to the government, and its interconnection with sanctions, my role as Director of OFSI has been expanded to include economic crime policy. This brings HMT’s sanctions policy and operational implementation roles together in one place and integrates them into the government’s broader economic crime agenda, as they are in most businesses’ financial crime compliance functions. I hope to use my expanded role to build stronger links between sanctions and broader economic crime work, exploiting the large overlap in threats, issues and stakeholders.
It’s been an interesting time to start my role at OFSI as we complete our transition from EU sanctions legislation to UK autonomous sanctions. There has been an enormous amount of work done over the last 4 years – in both public and private sectors – to reach this stage. The UK’s first autonomous sanctions of 2021 recently went live, with 4 security chiefs listed in the Zimbabwe sanctions regimes for serious human rights violations. Our current priority is to help stakeholders understand the changes, address any uncertainty or teething issues and operationalise our new autonomous powers. As an example, we recently published regime specific guidance on Libya and Russia to help stakeholders understand the complexities of these regimes.
As the year progresses, we look forward to increasingly utilising the new flexibility and powers we have so that the effective design and implementation of sanctions can play the fullest possible role in supporting the UK’s foreign and security policy. We have already taken advantage of new legislation to issue our first general licence to enable people to make payments to Crimean sea ports out of non-frozen funds. OFSI stands ready to consider issuing further general licences, as and when the need arises.
The UK will continue to work on sanctions with key partners such as the US and the EU, but also with a wider range of partners as we showed last year in collaborating with Canada on the Global Human Rights sanction regime. Sanctions are generally most effective when implemented multilaterally by as many countries as possible. It also makes complying with them more straightforward. But that is not always possible. Where it is in the UK’s interest to diverge from partners on sanctions, I see it as part of OFSI’s role to explain that divergence to stakeholders and help them manage it as effectively as possible.
Looking further ahead, I want OFSI to consolidate and build on the successes of its first 5 years. There is more we can do to fulfil our twin objectives of helping the private sector understand and implement financial sanctions and in turn, improving compliance. I want OFSI to deepen and broaden its relationships with key stakeholders in the private and public sectors through our engagement and guidance, earning a reputation for expertise, openness, transparency and collaboration. Last year’s maritime guidance was highly successful and widely read and the aim is to continue responding to the needs of industry to ensure greater compliance and understanding of sanctions particularly around emerging issues such as the increasing use of crypto assets. In that vein, OFSI will be conducting some targeted outreach on licensing in the spring, to note the changes, additions and practical application of this important tool. This should be particularly helpful to the UK’s humanitarian and charitable sector among many others.
I also want to enhance OFSI’s compliance work by further developing our relationships with law enforcement agencies, regulators and private sector bodies, so as to improve our collective understanding of compliance risks and trends and take a ‘whole-of-system’ approach to tackling them. OFSI will continue to robustly but fairly and proportionately use the compliance tools available to us, including monetary penalties, to effectively enforce financial sanctions in the UK, ensuring they meet the UK’s strategic objectives and maintaining our reputation as a world leader in this area.
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