
On 13 January 2025, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the UK’s Office of Financial Sanctions Implementation (OFSI) published an information sharing Memorandum of Understanding (MoU), signed by both parties on 9 October 2024.
The first reports of a partnership between OFAC and OFSI in the UK date back to 2022. Ever since, both sanctions regulators have regularly reported progress on this arrangement.
MoU’s main objectives
The partnership’s main objective is to increase collaboration between the two countries on investigating and enforcing economic sanctions and promoting compliance with sanctions regimes. The parties have agreed to share relevant information via mutual legal assistance mechanisms to conduct coordinated investigations, provide training for members of staff and make other practical arrangements.
Further and deeper engagement with private sector stakeholders is another objective aimed at securing the implementation and enforcement of sanctions. Financial institutions in both countries will be assisted by the regulators to identify and deal with critical issues facing the industry as regards the implementation of sanctions.
OFAC and OFSI are keen to support licensing and enforcement functions to ensure better implementation of financial sanctions, and the relevant arrangements to modernise both countries’ approaches have been made.
Potential implications for UK businesses
The increased cooperation between OFAC and OFSI will most likely result in the increased consistency in the implementation of sanctions measures. It is expected that OFAC will also share their enforcement experience with its UK counterpart, whose enforcement track record is rather limited. While OFSI is empowered to issue monetary penalties for sanctions breaches on a strict liability basis, only one monetary penalty of £15,000 has been imposed in the UK to date. Separately, the National Crime Agency has recently reported that it has not secured any criminal convictions in cases involving a breach of Russia sanctions, although a few dozen investigations are ongoing and there is at least one case in which a person is facing charges.
Companies should ensure that their compliance policies, including sanctions policies and screening systems, are robust and up-to-date. The global sanctions landscape will continue to evolve, and it is advisable for businesses not just to check the existing sanctions lists for positive matches, but to equip their employees with the necessary tools to assist with compliance, which may include regular training.
Updated: 3 February 2025
How Gherson can assist
Gherson’s International Protection Team are highly experienced in advising on UK sanctions matters, including compliance related services. If you have any questions arising from this blog, please do not hesitate to contact us for advice, send us an e-mail or, alternatively, follow us on X, Facebook, Instagram or LinkedIn to stay-up-to-date.
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