💪❓Weak enforcement has long been the Achilles’ heel of the UK’s fight against economic crime, and the early signs suggest that sanctions are no exception, with the UK’s flatline figures on sanctions enforcement underlining the need for closer scrutiny. 👀 So we closely followed today's Treasury Select Committee hearing with the Office of Financial Sanctions Implementation (OFSI) to see what was said about plans to strengthen sanctions enforcement. Here are some key points on #enforcement that stood out for us: 🔨 More enforcement on the horizon? Giles Thomson admitted he would be “very disappointed” if OFSI had still only issued 1 fine for a post-2022 breach of Russia sanctions in a year’s time, with more “high value” cases demonstrating OFSI’s ability to tackle sophisticated sanctions breaches set to be made public in the next few months. This will be a key test of whether OFSI's new intelligence unit is successful in moving to a more proactive enforcement approach rather than relying on self-reports. Around 4️⃣0️⃣0️⃣ - the number of cases OFSI currently has open. While Thomson stressed that most of these cases will involve no further action, it is essential that at least some involve more robust enforcement action if there is to be a proper deterrent for violating sanctions. ✉️ When asked why OFSI doesn’t disclose the number of cases it refers to law enforcement for criminal investigation, OFSI's Chris Watts outlined concerns that publishing these details could encourage people to not self-report breaches, if the number of referrals at any one time was considered low. This is typical of a wider reluctance by law enforcement to disclose information about their work, making it much harder for the public to hold them to account. 🤔 OFSI's Beth Davies emphasised that OFSI is: “really focused on a proportionate approach to enforcement and working with industry to support their compliance”. While fines are only one aspect of a wider enforcement approach, if the current record of a single £15K fine for a post February 2022 sanctions breach counts as proportionate, it’s not clear what robust enforcement action from OFSI we can expect to see down the line. 👍This £15k fine was overshadowed by the FCA’s robust £29m fine issued shortly afterwards against Starling Bank for “shockingly lax” sanctions and financial crime controls. Given OFSI estimates its investigations may take 2-3 years, it was encouraging to hear that OFSI is “looking closely” at the FCA fine which followed a 14-month investigation, to explore how it can improve the efficiency of its enforcement approach. 📖 Take a look at our recent report, as well as our new database of case studies of major sanctions-related cases, to find out more about what the UK could be doing to increase sanctions enforcement: Our report 👉https://lnkd.in/eUaPPYJJ Our sanctions case database 👉https://lnkd.in/eeB8hU9Z
