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Defeating Putin: the development, implementation and impact of economic sanctions on Russia
- Tom Keatinge, Director at the Centre for Financial Crime and Security Studies (CFCS), Royal United Services Institute (RUSI), called for “clear communication when the sanctions are issued, details that allow [firms] to understand precisely who or what is being sanctioned, and for them to be able to process that. At the moment, we do not have that to the level we need to have it.”[1] He saw the US as the “gold standard” for issuing sanctions guidance.[2]
- OFSI imposes monetary fines for breaches of sanctions and can pass suspected breaches of sanctions to the National Crime Agency (NCA) for further criminal investigation. The NCA provides support, including developing intelligence and providing specialist operational capability.[3] OFSI has imposed only six fines since it was set up in March 2016.[4] During this same period, the equivalent United States Office of Foreign Asset Control imposed 92 civil penalties (Penalties/Settlements) totalling $1,547,911,400.51.[5] However, Dr Walker cautioned that a “true picture” of OFSI’s work should also look at the number of cases “opened and the number of nonenforcement-type actions that it has issued.”[6] As we have noted above, the recent Economic Crime (Transparency and Enforcement) Act enables the Government to impose sanctions more quickly[7] and makes it easier to impose monetary penalties for breaches of sanctions.[8]
The role of OFSI
- The Office of Financial Sanctions Implementation (OFSI), which is a part of HM Treasury, states that it “ensures financial sanctions are properly understood, enforced and implemented in the UK”.[9] OFSI produces guidance for individuals and legal entities setting out its approach to licensing and compliance issues.[10] The latest published figures for the Office indicate that it has 37.8 full time equivalent staff.[11]
- Witnesses questioned whether OFSI currently had the resources to undertake the
twin tasks of compliance and enforcement, given the unprecedented scale of the task
which it faced.[12] Mr Keatinge said that:
If we had had this conversation two weeks ago, I would have said that is absolutely fine, but they are facing a mountain now. There is an important point on this. I have not seen any statements on OFSI, but I have heard the Foreign Secretary say there has been a tripling of capacity in the sanctions
- ↑ Q93
- ↑ Q9
- ↑ NCA, Bribery, corruption and sanctions evasion, last accessed 16 March 2022
- ↑ GOV.UK, Enforcement of financial sanctions, last updated 21 February 2022, accessed 16 March 2022
- ↑ US Department of the Treasury, Enforcement Information 2022, 2021, 2020, 2019, 2018, 2017, 2016 . Note that the number and total value of fines are calculated from 31 March 2016 onwards. Excludes ‘Additional Select Settlement Agreements’.
- ↑ Q90
- ↑ Economic Crime (Transparency and Enforcement) Act 2022 Part 3 Chapter 2 and Economic Crime (Transparency and Enforcement) Bill HL Bill 126 of 2021–22, Library Briefing, House of Lords Library, March 2022
- ↑ Economic Crime (Transparency and Enforcement) Act 2022, Part 3 Chapter 1 and Economic Crime (Transparency and Enforcement) Bill 2021–22, Research Briefing Number 9486, House of Commons Library, March 2022
- ↑ Office of Financial Sanctions Implementation, Bank of England, FCA, Joint Statement from UK Financial Regulatory Authorities on Sanctions and the Cryptoassets Sector, 11 March 2022, accessed 15 March 2022
- ↑ OFSI, UK Financial Sanctions: General guidance for financial sanctions under the Sanctions and Anti-Money Laundering Act 2018, December 2020, accessed 16 March 20202
- ↑ HM Treasury, HM Treasury Outcome Delivery Plan 2021 to 2022, 15 July 2021, accessed 16 March 2022
- ↑ For instance Mr Keatinge Q85
