OFSI publishes personal staff payments licensing guidance

19 Jun 2024, 39 mins ago

On 12 June, OFSI published their Personal Staff Payments Licensing Guidance. The guidance sets out OFSI’s approach to licensing personal staff payments. Applicants should use this guidance to understand whether OFSI is likely to license payments for the personal staff of designated persons.

OFSI considers personal staff as those who provide domestic or non-professional services to a designated person. This includes individuals employed directly by a designated person, by a company owned or controlled by a designated person or by a third party. Personal staff can include chefs, cleaners, drivers, house managers, personal assistants, launderesses and gardeners. The list is not exhaustive, and those seeking an OFSI authorisation should determine if other employees fall under this category.

Each application for the payment of personal staff of a designated person is considered on a case-by-case basis.  While OFSI is generally unwilling to license payments to personal staff of a designated person, exceptions may be made under specific extenuating circumstances.

Exceptions under licensing purposes:

  • Basic needs
  • Routine holding and maintenance
  • Prior obligations

Basic needs

Normally, OFSI would not license personal staff payments under the basic needs ground, as their services would be considered “luxuries” rather than a genuine necessity,  and it is expected that “the services provided by personal staff (such as those stated above) could be performed by the designated individuals themselves”. However, exceptions can be made if a clear and direct causal link is established between specific needs and the employment of the individual. Furthermore, OFSI indicated that “the needs catered for must go beyond general wellbeing and must be a service that ensures that a designated individual or their dependents are not imperilled”. If the lack of access to services may impact a designated person’s health, or a designated person may have legitimate fears of risks to their life and health, then OFSI is more likely to consider licensing payments for personal staff. It is for the applicant to ensure that they provide all relevant information for OFSI to consider.

Routine holding and maintenance

OFSI may license payments for the routine holding or maintenance of frozen funds or economic resources if those fees or services charges are “reasonable”.

As with the basic needs request, OFSI considers that payments for full-time maintenance staff are not licensable, as they do not meet the “reasonableness standard”. There may be exceptional cases, where it is necessary for the staff to maintain a designated individual’s property and, therefore, payments to such staff will be licensable. An OFSI licence application for re-design, refurbishment or redevelopment of a designated person’s property is likely to be refused, as such works would not meet the “reasonableness” standard.

Prior obligations

In most cases, personal staff of designated persons were employed and receiving salaries prior to a designation. It is OFSI’s view that the prior obligations ground should not be used by designated persons to maintain a lifestyle that they  had prior to designation. OFSI will generally license personal staff payments under the prior obligations ground to allow a designated individual to pay for services already provided, or to allow them to “wind down” the existing obligations. OFSI may consider payments for the work done up to the point of decision, or up to the point of redundancy, whichever is later. It would not, however, license activity retrospectively. OFSI would also consider the impact on the wellbeing of personal staff while making licensing decisions.

OFSI’s clarification provides valuable guidance on their approach to licensing and their expectations when it comes to licence applications. Gherson has significant experience in assisting companies and individuals with licence applications and interaction with UK regulators, including OFSI. Our lawyers can further advise on sanctions compliance.

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The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

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