Overview
The UK’s HM Treasury is holding a consultation, which is open for comment through January 26, 2017, on the process for the imposition of civil penalties for breaching financial sanctions. This is a major departure from the current law, which has not produced many enforcement actions, as it currently only allows for criminal enforcement of sanctions breaches or regulatory oversight for those operating in the financial services industry for failing to have adequate systems and controls in place for sanctions compliance.
This new civil sanctions regime would be applied under the Policing and Crime Bill, which Parliament is expected to enact early next year as the Policing and Crime Act 2017. Part 8 of the proposed Act sets out the new financial sanctions provisions, including civil monetary penalties of up to £1 million or 50% of the estimated value of funds or economic resources involved in the sanctions breach, whichever is greater. These new civil penalties would be applicable to businesses and other organizations, as well as to individuals (for company officials where the “balance of probabilities” shows that an offense involved the connivance, consent or neglect of the official). For more information, please see our advisory.
