UK Law and Practice Contributed by: John Binns, BCL Solicitors LLP
2.2.6 “Strict Liability” Criminal offences in connection with financial sanc - tions require the perpetrator either to know that funds or economic resources are owned, held or controlled by a DP (or an entity they own or control) or to have reasonable cause to suspect that this was the case. This requirement, however, is disapplied for the pur - poses of OFSI’s monetary penalties regime. While commonly referred to as an imposition of strict liability for sanctions breaches, this is not entirely accurate. Criminal liability remains unchanged, and monetary penalties for circumvention still require an Licences can be granted for acts that would otherwise breach sanctions regulations. Where these relate to financial sanctions, licences are granted by OFSI and must be covered by one or more of a set of grounds listed in annexes to the regulations. For financial sanctions generally, these grounds include: • to enable the basic needs of a designated person (or their dependents) to be met; • to enable the payment of reasonable legal fees and related expenses; • to enable the payment of reasonable fees or ser - vice charges for the routine holding or maintenance of frozen funds or economic resources; • to enable DPs to satisfy prior obligations (arising before they were designated); • to assist in insolvency or restructuring proceed - ings; and • to cover extraordinary expenses or to address extraordinary situations. OFSI can also grant licences for the provision of trust services, while licences for the provision of other ser - vices (that would breach trade sanctions) and various goods are dealt with by the Export Control Joint Unit (ECJU), part of the Department of International Trade. intentional act. 2.3 Licensing 2.3.1 Derogation
winding-up of the firm’s Russian office) has exceeded GBP30,000. Even this penalty was dwarfed by that imposed by the FCA against Starling Bank, in the sum of GBP29 million (primarily for its significant failures in sanctions Criminal enforcement action for sanctions breaches remains rare in the UK. The first convictions were obtained in April 2025 against Dmitrii Ovysannikov (a DP and the former governor of Sevastopol) and his brother, Alexei Ovysannikov, in connection with vari - ous transactions undertaken for Dmitrii’s benefit after he was removed from the EU’s sanctions list (though while he remained a DP in the UK). Dmitrii received a sentence of 40 months’ immediate imprisonment, while Alexei was sentenced to 15 months ‘ imprison - ment, suspended for 15 months. Not-guilty verdicts were returned on separate charges of circumven - tion and against Dmitrii’s wife, who told the jury she thought the EU de-listing had also applied in the UK. 2.2.5 Mitigation Co-operation and Self-Reporting OFSI’s published guidance emphasises the positive impact on penalties when a perpetrator self-reports and co-operates with the ensuing investigation. In practice, much will depend on: • the details of how the breach took place; • who was involved; • the quantum of assets that were handled or not reported; and • the extent to which any ongoing impact can be remedied. Preventative Procedures The guidance specifies that OFSI will consider any compliance procedures a business has established to prevent unintentional breaches of sanctions, even if those procedures ultimately fail to prevent a violation. Consequently, businesses may find significant value in designing and implementing these procedures, although monetary penalties can now be imposed on a “strict liability” basis (refer to 2.2.4 “Strict Liability”). compliance) on 2 October 2024. 2.2.4 Criminal Enforcement Action
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