UK Updates Guidance on Sanctions Enforcement, Penalties
The U.K. on March 16 updated its guidance relating to the Office of Financial Sanctions Implementation's enforcement and monetary penalties for financial sanctions breaches to include a new section on ownership and control, according to the EU Sanctions blog. The new section states that where OFSI finds a sanctions breach, and an "incorrect assessment of ownership and control of an entity is relevant to the commission of the breach, OFSI will consider the degree and quality of research and due diligence conducted on the ownership and control of that entity," the blog post said.
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The guidance added that OFSI does not prescribe the level of due diligence needed to ensure sanctions compliance, but it will consider appropriate due diligence to be a mitigating factor when "the ownership and control determination reached was made in good faith," the blog said. OFSI can also consider a failure to carry out proper due diligence on an entity's ownership and control, or bad faith due diligence, as an "aggravating factor."
OFSI will also consider whether a party's level of due diligence was appropriate "to the degree of sanctions risk and nature of the transaction, taking into account the nature of a person's contractual or commercial relationship with the entity." OFSI would "expect to see evidence" of a decision-making process that accounts for sanctions risk and considers what the proper amount of due diligence is in light of that risk, the blog post said.