UK Sanctions Agency Issues First-Ever Fine Against London Bank

In February 2019, we saw the UK’s Office of Financial Sanctions Implementation (OFSI) (not to be confused with the Canadian regulator the Office of the Superintendent of Financial Institutions (OSFI) impose a £5000 fine against London based Raphaels Bank, the first fine levied by the agency since its creation in 2016. 

The penalty, issued under the new Policing and Crime Act 2017, was imposed for a £200 transaction that was in contravention of an unspecified violation of an Egyptian sanction freezing order. The funds were linked to a blacklisted individual, and once the bank became aware of the breach, it disclosed the violation. The fine would have been £10,000 had the bank not cooperated with the agency. 

“OFSI imposed the monetary penalty because it was satisfied, on the balance of probabilities, that Raphaels Bank breached a prohibition that is imposed by or under financial sanctions legislation, and knew, or had reasonable cause to suspect, that they were in breach of the prohibition,” the agency said. 
OFSI and the Policing and Crime Act 2017 – The Office of Financial Sanctions Implementation, was established in 2016 and is part of HM Treasury.  OFSI helps to ensure that financial sanctions are properly understood, implemented and enforced in the UK. This in turn enables financial sanctions to make a full contribution to the UK’s foreign policy and national security goals which also helps to maintain the integrity of, and confidence in the UK financial services sector. 

Policing and Crime Act 2017 – This received Royal Assent on 31 January 2017, so OFSI were certainly quick off the mark to use it. The Act itself covers a myriad of topics and its 406 pages make for interesting reading, and in the main cover lots of policing and police operational matters, although there are some key elements for us all, especially when considering suspicious activity reporting relating to the proceeds of crime and financial sanctions. 

  • In short, some of the provisions covered are:
  • For collaboration between the emergency services,
  • The handling of police complaints,
  • The Independent Police Complaints Commission,
  • Investigation of concerns about policing raised by whistle-blowers,
  • The system of bail after arrest but before charge,
  • Retention of biometric material,
  • Amendments to the Police and Criminal Evidence Act 1984,
  • Amendments to the police under the Mental Health Act 1983,
  • Making provision for cross border enforcement,
  • The power of the police to require removal of disguises,
  • The regulation of firearms and pyrotechnic articles,
  • The implement and enforcement of financial sanctions,
  • The powers of the National Crime Agency,
  • Requiring arrested persons to provide details of nationality,
  • The seizure etc of invalid travel documents,
  • The pardon for convictions for certain abolished offences (i.e. the Alan Turing Law),
  • Protection of the anonymity of victims of forced marriage,
  • Increase the maximum sentence of imprisonment for certain offences of putting people in fear of violence,
  • To combat the sexual exploitation of children, and
  • To protect children and vulnerable adults from harm.