The banking sector is the place where most problems to do with the financing of illicit nuclear weapons are to be found, according to OFSI, and the organisation has been good at spreading tips and awareness about this among them. 'Outreach' is the watchword.

The communication of a 'designation' (the labelling of someone as a sanctioned party) by OFSI occurs within one business day. If a designation occurs on a Friday, Saturday or public holiday it might take four calendar days.

The Policing and Crime Act 2017 increased the maximum custodial sentence for a breach of financial sanctions from two to seven years, in line with a trend that is happening throughout the spectrum of British sentencing. Also, in April 2017, OFSI was given the power to impose a non-criminal monetary penalty for breaches and the UK’s Deferred Prosecution Agreement (DPA) and Serious Crime Prevention Order (SCPO) regimes were extended to cover financial sanctions offences. Until then, the British state could only impose criminal penalties for the breaking of sanctions.

If sanctioned HNW people need to use some of their frozen monies to cover their basic needs, OFSI sometimes obliges. Between January 2015 and November 2017, it issued eight licences under the ISIL (Da’esh) & Al Qaida regime, mostly for that purpose.

When OFSI is aware that certain British financial institutions have had dealings with anyone or anything due to be designated, it talks to them immediately (before updating its consolidated list) to prepare them for the inevitable asset freeze. OFSI provides an email notification service on a website which updates its 21,000 subscribers and informs financial firms about their obligations by answering frequently-asked questions on the gov.uk webpage.

The communication of designations by OFSI is not immediate (although the legal requirement to freeze occurs immediately).

In line with the EU, OFSI defines 'ownership' as 50% or more of the proprietary rights of something or a majority interest in it. Neither the Terrorist Asset-Freezing Act 2010 nor the EU regulations expressly require the freezing of jointly owned assets but OFSI provides non-binding guidance on the subject which says that banks might freeze jointly-held assets if there is a risk that funds or assets will become available to designated persons or entities.

Growing power

OFSI, however, appears to be growing in stature as time passes. In its report from the autumn of last year, it states that the Chancellor of the Exchequer, the UK's finance minister, granted it more funds in 2018 that allowed its team to grow by one-fifth. It imposed its first monetary penalties on financial firms for breaking financial sanctions last year. In 2018-19 the UK implemented 32 financial sanction regimes, three more in the previous year, with OFSI playing its part. 2,183 people and entities were subject to asset freezes by 28 regimes as of 28th March 2019 and they all appeared on OFSI's list. It added 162 targets to the list over the financial year of 2018-19, up from 122 in the previous years.

Enforcement actions so far

These are the known enforcement actions in which OFSI imposed a punitive charge. The first and second are financial service firms that dealt with funds belonging to sanctioned people without licences; the third made economic resources available to one. The sanctioned country in question is listed as well.

Raphael & Sons Bank...£5,000 on 21 January 2019...........Egypt.
Travelex UK..................£10,000 on 8 March 2019.............Egypt.
Telia Carrier UK Ltd.....£146,341 on 9th September 2019..Syria.
Total..............................£161,341

The Economic Secretary to the Treasury's anti-terrorist quarterly report (Written Ministerial Statement) for the period of 1 July 2019 to 30 September 2019 reveals that the funds that OFSI freezes are truly tiny. Under the Terrorist Asset-Freezing etc Act 2010 it froze £9,000. Under the EU Regulation (EC) 2580/2001 (aka the CP 931 regime) it froze £18,000. Under the ISIL-AQ regime underpinned by EU Regulation 881/2002 it froze £70,000. OFSI's power, however, appears to be in the ascendant nonetheless.