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UK launches new financial sanctions department

  • United Kingdom
  • Competition, EU and Trade - Export controls and sanctions
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  • Financial services
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On 31 March 2016 the Treasury announced the launch of the Office of Financial Sanctions Implementation (“OFSI”), a new department within the Treasury. The OFSI has been created to support the UK’s foreign policy and national security goals.

The OFSI’s principal aims are to: 

  • increase awareness of and compliance with financial sanctions;
  • ensure that sanctions breaches are rapidly detected and effectively addressed;
  • provide a professional service to the public and industry on financial sanctions issues; and
  • help maintain the integrity of and confidence in the UK financial services sector.

In its role, the OFSI will continue and build on the work previously carried out by the Treasury’s Financial Sanctions team. Any applications, reports or queries previously submitted to the Financial Sanctions team will be transferred to and processed by the OFSI.

The Treasury press release can be found here

From an administrative perspective, it may seem that little will change for businesses. However, the creation of the OFSI follows an announcement made by the Chancellor in the Summer Budget 2015, in which it was noted that the OFSI will work closely with law enforcement authorities. Given the Policing and Crime Bill presented to Parliament in February 2016, which proposes to increase criminal penalties for financial sanctions breaches, we can expect a shift towards much tougher enforcement of financial sanctions in the UK.