https://ofsi.blog.gov.uk/2018/05/22/reporting-to-ofsi-how-working-together-helps-makes-sanctions-more-effective/

Reporting to OFSI: how working together helps makes sanctions more effective

Financial sanctions help achieve the UK’s foreign policy and national security objectives, preventing terrorist financing, while maintaining confidence in the integrity of the UK’s financial service sector. But they only work if they are properly implemented. One of OFSI’s key roles, as the competent authority for the implementation of financial sanctions in the UK, is to detect and address financial sanctions breaches. You can help us to do this by reporting any activity that you suspect may be a breach of sanctions.

 

What must I report?

EU financial sanctions legislation requires you to report immediately any information that would facilitate compliance with the regulations. OFSI interprets this to include identifying information you may hold about a designated individual or entity, assets you have frozen, and information about suspected breaches of financial sanctions.

UK financial sanctions legislation, which enforce EU financial sanctions regulations, set out additional specific reporting obligations which require certain individuals, entities and organisations to report the following to OFSI:

  1. If you know or suspect that a person or entity is an asset freeze target
  2. If you know or suspect that someone has committed a breach of financial sanctions offence
  3. If you have frozen the assets (funds or economic resources) of a designated person or entity

You only need to report this information if, as a ‘relevant institution, business or profession’, it comes to you while carrying out your business. For example, you don’t need to tell us someone is a designated person if you hear a news report. But if a report about sanctions prompts you to examine your own activities, and you find something covered by the above areas, then you need to report it to OFSI.

When you report to OFSI, please provide us with the information on which your knowledge or suspicion is based and all the information that you hold to identify the person or entity. This could include company information, name, address, date of birth, passport or identity cards details. This helps us discover any new aliases that are being used to evade sanctions or hide assets that need to be frozen. If you have any identifying information about a designated person that is not on OFSI’s consolidated list, we want to know.

Who must report?

For relevant institutions, businesses and professions there is a legal requirement to report to OFSI and there are criminal and civil penalties for not doing so. This obligation generally covers all financial institutions. It also includes (but is not limited to) the following businesses and professions:

  • an auditor
  • a casino
  • a dealer in precious metals or stones
  • an estate agent
  • an external accountant
  • an independent legal professional
  • a tax adviser
  • a trust or company service provider

When must I report?

Each situation is different but we’ve put together some examples of when you must report to OFSI.

  • Notifying us that you, a provider of professional services, have been approached by someone you suspect is a designated person (or someone working on their behalf). They may be attempting to circumvent sanctions and you must inform OFSI, and include any identifying information you hold about them.
  • You work in a company, for example a law or accountancy firm, and become aware that one of your clients may be dealing in funds that belong to a designated person. Your client may be breaching financial sanctions and you must report this information to OFSI, along with any information by which they can be identified.
  • A customer or client of yours becomes subject to financial sanctions. You must report to OFSI if you hold any of their assets and have frozen them. You also need to include any information by which they can be identified.
  • You are a financial institution and have blocked a payment going to someone you suspect is a designated person. Your investigation into the blocked payment has given you reasonable cause to suspect that the person sending the funds has committed an offence by attempting to make funds available to a designated person. You must report this to OFSI as soon as is practicable along with any information you hold about that person by which they can be identified.

OFSI will always treat any information you provide in accordance with the relevant financial sanctions and data protection legislation.

Please note that the reporting requirement does not apply to information to which legal privilege is attached. However OFSI expects legal professionals to carefully ascertain whether legal privilege applies, and which information it applies to.

How should I report?

We’ve updated our reporting form to make it easier for you to report information relating to financial sanctions to us. You can find the new form here. You can now use the form to report a suspected designated person or assets that you have frozen, as well as a suspected breach.

If you file a report regarding a suspected breach, we will assess whether a breach has occurred and will look at different aspects of the case to decide what action to take. For more information on case assessment, look at our Monetary penalties for breaches of financial sanctions guidance.

For more information on your reporting obligations to OFSI, please see chapter 5 of our general Financial Sanctions guidance. If in doubt, you may wish to seek independent legal advice.

Are you reporting correctly?

Please note that your reporting obligations under financial sanctions legislation are separate, and will in some cases be in addition, to other reporting obligations you may have, for example to your regulator, professional supervisor, or UK law enforcement. Submitting a Suspicious Activity Report (SAR) to the National Crime Agency, for example, does not meet your financial sanctions reporting obligations – matters relating to financial sanctions must be reported to OFSI.

Financial sanctions legislation requires you to report as soon as possible and we will always act on reported information.

Timely reporting has already helped us prevent and deter further breaches, as well as understand complex evasion tactics used by some parties, such as those financing the development of nuclear weapons.

Please email us if you would like to know more about our reporting forms.

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