Minimum £1m penalty introduced for breaching financial sanctions

The Treasury’s Office of Financial Sanctions Implementation (OFSI) will be able to impose penalties of up to £1m or 50% of the financial sanctions breach, depending on which is higher, from April 2017

The Treasury has launched a consultation on the approach to imposing the penalties asking for views on:

  • whether a civil monetary penalty is suitable;
  • the level of any penalty;
  • the process of imposing the penalty, including the timescales for the process and the rights of the penalised person or entity; and
  • the circumstances in which OFSI will publish details of the monetary penalties it imposes.

The OFSI as well as imposing penalties will publish details of serious breaches to ensure businesses and organisations comply and to deter non-compliance.

Simon Kirby, economic secretary, said: ‘Financial sanctions are a powerful tool in defending our national security, but their strength has been diluted by those who breach sanctions regulations.

These new cash penalties will incentivise everyone to comply with the rules, keeping our country safe and strong.’

The legislation is part of the aim to toughen the government’s response to sanctions breaches in the Policing and Crime Bill, which is currently making its way through Parliament.

In 2015 there were over 100 suspected breaches to financial sanctions, applicable in the UK. Breaches include deliberately channelling money to organisations or individuals that are subject to financial statements when their bank accounts or finances have been stopped.

The consultation closes on 26 January 2017.

The process for imposing monetary penalties for breaches of financial sanctions: consultation, is here.

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