Financial Crime World

Enforcement Process and Appeal Process: A Guide

Civil Enforcement Process

The Office of Financial Sanctions Implementation (OFSI) is responsible for enforcing financial sanctions in the United Kingdom. The civil enforcement process involves several steps:

  • Warning: OFSI may issue a warning to individuals or organizations that have potentially breached financial sanctions.
  • Referral to professional body or regulator: Regulated professionals or bodies may be referred to their relevant professional body or regulator for investigation and potential disciplinary action.
  • Publishing information about breaches: Even if no penalty is imposed, OFSI may publish information about a breach to deter others from committing similar offenses.
  • Imposing civil monetary penalties: OFSI may impose fines on individuals or organizations that have breached financial sanctions.
  • Referral to law enforcement agencies: In severe cases, OFSI may refer the case to law enforcement agencies for criminal investigation.

Assessment of Penalties

When assessing penalties, OFSI considers several factors:

  • The value of the breach
  • The harm or risk of harm to the objectives of the relevant sanctions regime
  • The level of actual and expected knowledge of financial sanctions by the individual or organization
  • The behavior of the individual or organization (e.g., deliberate, negligence, or mistake)
  • Repeated, persistent, or extended breaches
  • Voluntary self-disclosure of suspected breaches
  • Public interest in responding to the breach

Penalty-Decision Process

OFSI has a three-part penalty-decision process:

  1. Determining breach and penalty: OFSI determines whether there has been a breach and whether a penalty is appropriate and proportionate.
  2. Calculating baseline penalty: OFSI calculates the statutory maximum penalty and then assesses what level of penalty is reasonable and proportionate based on the seriousness of the case.
  3. Making penalty recommendation: OFSI makes a penalty recommendation.

Appeal Process

The appeal process involves the following steps:

  1. Written notice: OFSI issues a written notice stating the penalty amount after the period for making representations has expired.
  2. Ministerial review: The recipient may inform OFSI that it wants a ministerial review of OFSI’s decision within 28 working days upon receipt of the written notice.
  3. Review decision: Upon review, the penalty will either be upheld (with the amount either upheld or altered) or cancelled.
  4. Upper Tribunal appeal: If the decision is made to uphold the penalty (with the amount either upheld or altered), the person subject to the penalty has the right to appeal to the Upper Tribunal within 28 days of the review decision.

Companies Challenging Penalty Assessments

Four companies have challenged a monetary penalty decision through ministerial reviews:

  • Telia Carrier UK Limited
  • Standard Chartered
  • TransferGo Limited
  • Hong Kong International Wine and Spirits Competition Ltd.