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Financial sanctions are powerful weapons of economic warfare which can have a devastating impact. Often imposed suddenly and in response to an unforeseeable event, they freeze assets and restrict access to financial markets, funds and economic resources.
Breaches of sanctions law can be punished by up to seven years imprisonment, unlimited fines and civil penalties of up to £1 million or 50% of the value of the assets (whichever is greater). In the UK, compliance with sanctions is administered by the Office of Financial Sanctions Implementation (OFSI) which deals with notifications and applications for licences to deal in assets subject to sanctions.
Criminal enforcement is dealt with by the National Crime Agency (NCA). A sanctions conviction may also prompt other criminal investigations, such as into money laundering or terrorist financing. It can also lead to the imposition of other measures such as Account Freezing Orders and Unexplained Wealth Orders.
The international nature of sanctions law means any advice should take in to account the jurisdictional reach of international and supranational bodies such as the US Treasury Office of Foreign Asset Control (OFAC), the European Union and the United Nations.
Hickman & Rose’s expert sanctions lawyers have advised both organisations and individuals caught up in some of the most serious and high-profile sanctions matters of the past twenty years. Our solicitors regularly provide legal advice to companies, organisations and individuals which engage in cross-border transactions and are concerned about sanctions law compliance.
The primary law governing sanctions in the UK is the Sanctions and Anti-Money Laundering Act 2018 although specific prohibitions relating to particular regimes or individuals may be implemented through other regulations, such as the Russia (Sanctions) (EU Exit) Regulations 2019.
Under the 2018 Act, the Government can impose sanctions on any individual or ‘legal person’ such as a corporate body. This webpage contains a list all current designated persons, as determined by the UK Government.
The precise nature of the restrictions imposed on a sanctions target will vary case by case. Some will be hit with an asset freeze, meaning all their UK-based funds and economic resources must be frozen, and that no funds can be made available (directly or indirectly) to them unless this is permitted by a licence issued by HM Treasury. Others may be given a travel ban or a prohibition on certain financial transactions.
The sanctions regime requires absolute compliance to avoid the risk of prosecution.
Criminal liability arises if sanctions are breached either by a designated person, or by any individual or company which transacts with a designated person. Firms and individuals in certain sectors such as finance have strict reporting obligations if they know or have reasonable grounds to suspect that clients are committing sanctions offences.
Both the targets of sanctions and those associated with them through economic connections are advised to obtain expert advice on compliance and risk of breaches as well as on the interrelationship with other aspects of enforcement such as anti-money laundering and counter terrorism financing legislation.
The complex, international nature of sanctions law means organisations and individuals run a risk of investigation and potential prosecution simply due to ignorance of their legal obligations. Hickman & Rose specialise in advising companies (and organisations such as charities) on how to best fulfil their legal duties in relation to sanctions including how to notify and apply for licences to the Office of Financial Sanctions Implementation (OFSI).
Export controls are a set of restrictions that apply to certain categories of ‘strategic’ product manufactured in the UK. The various lists of controlled items are periodically updated. The latest lists are available here.
UK export controls law is governed by the Export Control Act 2002 and the Export Control Order 2008. Breaching the restrictions can result in up to 10 years imprisonment.
Any person or organisation which trades – or seeks to trade – in the above listed categories of product is advised to seek expert legal advice before doing so.
Hickman & Rose’s business crime and regulatory law teams have significant experience acting for clients in sanctions and export control-related matters, and also in liaising with OFSI regarding notifications and applications for licences. Many of these cases have been successfully concluded outside the public domain. M Matters which have received some publicity include:
– Advising a household name charity on the impact of financial sanctions against Russia in relation to a significant proposed donation by a corporate entity linked to certain high-profile individuals.
– Advising a UK charity about transfers of funds to Russia and notifications to OFSI.
– Acting for an individual prosecuted for breach of sanctions and export controls regarding the alleged export of military equipment to Iraq.
– Acting for a senior individual in the British armed forces investigated for breaches of export controls concerning consignments of military equipment to an African country.
– Acting for an international logistics company regarding allegations of breaching trade sanctions with Iran.
– Advising an international charity about the risk of breach of sanctions regarding a project in Syria.
– Advising another international charity about sanctions issues concerning historical connections with a designated organisation in Lebanon.
25 Jul 2024
Hickman & Rose client Carlo Palombo has been granted permission to appeal his EURIBOR related criminal conviction, together with Tom Hayes’ LIBOR-related conviction, to the Supreme Court.
In…
24 Jul 2024
The latest edition of Blackstone’s Magistrates’ Court Handbook, co-written by Hickman & Rose’s Bartholomew Dalton, has been published and is available for purchase.
Authored with Hodge Jones…
10 Jul 2024
Business Crime partner Ross Dixon has been quoted in a Law Society Gazette article on the challenges facing the Serious Fraud Office under its new director Nick Ephgrave.
Ross is quoted in…
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