OFSI evidence to Treasury Committee Economic Crime Inquiry

The House of Commons Treasury Committee took oral evidence as part of its Economic Crime Inquiry from OFSI Director Rena Lalgie, Simon York (HMRC Fraud Investigation Service Director), and Alison Barker (FCA Director). The main sanctions points (transcript here) are:

• In 2017 OFSI received 133 reports of suspected sanctions breaches, estimated value £1.4 billion (see February 2018 blog).

• OFSI’s new civil monetary penalty powers may be used in cases where sanctions breaches occurred after 1 April 2017. OFSI guidance says it “will use [those powers] for the most serious breaches of financial sanctions. Those cases are starting to come through. Where we see them coming through, we will not hesitate to use [those powers].”

• In response to the suggestion of “inadequate” enforcement of sanctions breaches (103 of the 133 reported breaches had been reported to OFSI since it gained its powers to impose civil monetary penalties), OFSI Director Rena Lalgie said that did “not mean those breaches occurred within that particular year, and we have not assessed all of those as being actual breaches”. And “at a glance, it is easy to infer that, because we have not issued one of those [civil monetary] penalties yet, we are not enforcing the system. I do not think that is right. We are taking some form of action in every case of non–compliance that we see, but it has to be proportionate to the facts of the case.”

• OFSI has powers to “share information with anybody as long as it is to further compliance with the regulation. That means [it does] share information with other regulators: the FCA, the [SRA] and others.”

• OFSI works “very closely with colleagues in the Foreign Office and with colleagues across the EU who are thinking about the sanctions regime. There is a richness to the information that we see through our implementation, which can really support and help to inform future policy. We have seen examples where the experience of the trickiness around implementing financial sanctions has therefore informed the way in which sanctions regimes have been revised and updated.”