The government is ramping up the enforcement of financial sanctions legislation. Historically enforcement of financial sanctions in the UK has been limited with very few criminal prosecutions. For an explanation of financial sanctions and an overview of the proposed changes click here.
The government is introducing the power to impose civil monetary penalties for breaches of financial sanctions in the Policing and Crime Bill. The law is expected to come into force in April 2017.
The government recently published guidance on the process that the Office of Financial Sanctions Implementation (OFSI) will adopt when deciding whether to impose a penalty and the amount. Please click here for our short summary of the process. The government has launched a consultation for businesses to comment on the guidance, which closes on 26 January 2017.
We will be responding to the consultation based on your answers to seven multiple choice questions, which should only take a few minutes to complete click here. If you would like to read the government guidance first, click here, but it is not essential to do so to answer the questions.
Important points to note are:
- Low burden of proof - The penalties are a civil remedy. The OFSI will determine liability on the balance of probabilities – a criminal conviction would require a breach to be established beyond reasonable doubt.
- Penalties could be very large – the baseline penalties will be the greater of £1m or 50% of the value of the breach.
- Penalties can be imposed on individuals including office holders in a company who consented or connived in the breach or where the breach was attributable to their neglect.
- Penalties will be published by the OFSI
- Discounts of 50% will be given for voluntary disclosure. This discount will be reduced to a discretionary discount of up to 30% in the most serious cases.
Penalties may also be imposed for a failure to provide the OFSI with information.
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