UK Civil Sanctions, Export Control Enforcement on the Rise, Lawyer Says
Sanctions and export control enforcement in the United Kingdom has increased significantly in the past year as the country emphasizes more investigative work and higher penalties, said Tristan Grimmer, a compliance lawyer in Baker McKenzie’s London office.
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Grimmer, speaking during a July 15 conference hosted by the law firm, said U.K. companies are specifically seeing “penalties pick up” under the country’s civil penalty regime for sanctions violations. He said the Office of Financial Sanctions Implementation is issuing million-pound fines where penalties previously ranged in the hundreds of thousands. OFSI agents are also conducting “a far more invasive investigatory approach” to pursue civil enforcement, partly because the burden of proof for civil cases is much lower than under the U.K.’s criminal law.
“We're seeing them being far more detailed,” Grimmer said. “They are pushing to have more face-to-face meetings to test facts and explanations in a way that they did not previously.”
The increased enforcement hasn’t yet extended beyond civil cases because “it's extremely difficult” to “make criminal enforcement stick against corporate organizations,” Grimmer said. Under criminal law, he said, the U.K. government must prove that an organization's senior board members were complicit in the violations. But Grimmer added that the law is under review and changes may be made to bring U.K. sanctions enforcement “far more in line with what the U.S. has,” where liability can be attributed to an employee of the company. “So the message is, in the U.K., you should be aware of a heightened sanctions exposure,” Grimmer said.
Companies are also seeing increased civil export-control enforcement in the U.K. and across the European Union, particularly in Germany and the Netherlands, Grimmer said. He said the U.K. doubled its number of export control enforcement cases last year, and penalties are also rising. “We were used to seeing, five years ago, penalties in the tens of thousands [of pounds],” he said. “Hundreds of thousands are now becoming more common.”