Financial Crime World

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UK Imposes Strict Controls on Funds Transferred to Designated Persons

The UK has introduced a range of measures aimed at preventing the transfer of funds to designated persons (DPs) in an effort to combat financial crime and terrorism. Under these new regulations, any individual or organization found to be making relevant funds available to DPs could face severe consequences.

Prohibitions on Making Relevant Funds Available

The UK has prohibited the making of relevant funds available directly or indirectly to the Libyan Investment Authority (LIA) and the Libyan Arab Investment Company (LAIP), as well as to any person for the benefit of these entities. Relevant funds are defined as:

  • Interest or other earnings due on funds held in a relevant account which are frozen by virtue of the partial asset freeze
  • Funds due to a designated person by virtue of an obligation that arose prior to their designation

Exceptions and Licences

There are certain exceptions to these prohibitions, including cases where:

  • A relevant institution credits a frozen or relevant account with interest or other earnings due on the account
  • Licences may be issued by the Office of Financial Sanctions Implementation (OFSI) in certain circumstances, such as:
    • For the provision of fuel for civilian use
    • For the resumption of banking sector operations

Oil on UN-Designated Ships

The UK has also prohibited financial transactions relating to Libyan oil aboard vessels designated by the United Nations. This includes all petroleum, crude oil, and refined petroleum products that originate from Libya.

Ownership and Control

Entities that are majority owned or controlled by a DP are subject to the financial prohibitions applying to the DP, including an asset freeze. Regulation 7 sets out that:

  • “Owned” or “controlled” includes both direct and indirect ownership or control

OFSI Consolidated List and UK Sanctions List

The OFSI consolidated lists reflect all financial sanctions designations made under UK legislation, while the UK Sanctions List is a comprehensive list of persons, entities, or ships designated under sanctions regimes set up using the powers of the Sanctions Act.

Compliance

Breaches of financial sanctions are a serious criminal offence and can result in severe penalties, including:

  • Monetary fines
  • Imprisonment

The UK authorities urge all individuals and organizations to ensure compliance with these regulations to avoid any potential consequences.

Further Support

For further guidance on UK financial sanctions, individuals and organizations can:

  • Consult OFSI’s general, geographic, and sectoral guidance
  • Access webinars for maritime and shipping
  • Subscribe to E-Alerts from OFSI
  • Email OFSI directly