OFSI takes stock: A year in review
The biggest initial consideration for industry following the end of the transition period marking the United Kingdom’s departure from the European Union was ensuring that the UK’s ‘consolidated list of asset freeze targets rapidly and accurately reflected the full scale of changes made as part of EU transition…Industry’s reliance upon the list for their sanctions implementation and its functionality made this a crucial piece of work.’
So says the UK sanctions regulator, the Office of Financial Sanctions Implementation (‘OFSI’), in its Annual Report for 2020-21 – a document which outlines its work in that period and, in particular, the implementation of an autonomous sanctions framework.
This transition, it says, ‘meant there were also changes to licensing including new licensing grounds (derogations) in respect of non-UN designated persons and adjustments to existing licensing grounds.’
‘These changes included adding a requirement for “reasonableness” to the licensing ground for “maintenance of frozen funds and economic resources” (also referred to as “routine holding and maintenance”) as well as to the licensing ground for the payment of legal fees and expenses to clarify that disbursements must also be reasonable. Also included was a new licensing ground for extraordinary situations, and the basic needs ground now explicitly refers to entities as well as individuals,’ it says.
OFSI says that in the financial year 2020 to 2021, it issued 43 new licences and made 75 amendments across 11 regimes while ‘two authorisations and two general licences were also issued.’
It noted, ‘The majority of new and amended licences issued by OFSI during this review period were issued under the Libya regime. In terms of derogations, the majority of licences were issued under two licensing grounds: 18 for basic needs and 19 for legal fees. The number of licences issued under these grounds has remained largely consistent with those issued in the previous review year. When compared to the financial year 2019 to 2020, there has been a small increase in the number of licences and amendments granted by OFSI. In this review period, OFSI have issued 43 licences, an increase of 7.5% when compared with the previous review period.’
For insight into the workings and ambitions of OFSI, see the interview with OFSI director Giles Thomson in Issue 2 of Financial Institutions Sanctions Compliance (FISC) www.fiscjournal .com
