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Volume XII, Number 336

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OFSI’s Annual Review Highlights Effect of Sanctions on Russia

On 10 November, the UK’s Office of Financial Sanctions Implementation (OFSI) published its annual review for the period April 2021 to August 2022, with a focus on the effect of sanctions on Russia following the invasion of Ukraine in February. OFSI describes its response to the invasion as “unprecedented”, having put in place “the most stringent financial sanctions in history”, and states that:

  • Between the start of the invasion and 20 October 2022, £18.39 billion worth of Russian assets has been reported as frozen to OFSI (as of September 2021, the figure was £44.5 million);

  • 236 breach reports have been received by OFSI since the invasion;

  • 33 general licences were issued between February and August 2022; and

  • 1,271 new Russia regime designated persons were added to the consolidated list.

Policing this regime takes resources – the review confirms that only two monetary penalties (totalling £86,393.45) have been issued in the last financial year. Those concerned about the speed and breadth of enforcement action, however, should note that OFSI intends to have over 100 full-time employees by the end of 2022 (compared to 45 at the start of 2022), armed with increased enforcement powers under the Economic Crime (Transparency and Enforcement) Act 2022, including:

  • A strict civil liability test for breaches of financial sanctions.

  • An ability to publicise details of financial sanctions breaches even if no monetary penalty has been imposed; and

  • Greater information-sharing powers.

Similarly, OFSI has committed additional resources to its licensing function, and has stated that it is working on streamlining the procedure for licence applications to speed up the decision-making process. When this additional resource will start to make a material difference to businesses operating within the sanctions regime is difficult to say, but the review underlines the importance of taking active steps to monitor sanctions compliance.

©2022 Greenberg Traurig, LLP. All rights reserved. National Law Review, Volume XII, Number 325
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About this Author

Shareholder

Annabel Thomas is an experienced commercial litigator with a strong background in corporate disputes and civil fraud. She represents clients on matters involving asset-tracing and injunctive relief; partnership disputes; competition law; and regulatory/disciplinary litigation. She also handles company and shareholder disputes (including unfair prejudice claims, breach of directors' duties, JV disputes, LLP disputes and breach of warranty and indemnity claims), as well as insurance disputes (including coverage, subrogated recovery and brokers' negligence). Annabel's...

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Associate

Bethany Histed focuses her practice on commercial litigation, civil fraud, and complex multi-jurisdictional disputes. She has worked on complex contentious cases of significant value involving allegations of fraud, conspiracy, breach of fiduciary and directors’ duties, breach of contract, claims under the Insolvency Act 1986, and unfair prejudice petitions under section 994 of the Companies Act 2006. Bethany also has experience of dealing with asset disclosure and preservation issues.

Bethany acts for a wide range of clients including high-net-...

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Senior Associate

Gavin Costelloe is a senior associate in Greenberg Traurig’s White Collar Defense & Special Investigations Practice in London. Gavin is a former lawyer and prosecutor for the UK’s Serious Fraud Office (SFO). Gavin advises companies and individuals on internal, government and regulatory investigations and compliance issues related to the UK Bribery Act, fraud, market manipulation, anti-money laundering, economic sanctions, and other serious and complex cross-jurisdictional matters. Gavin has considerable experience assisting with diligence for mergers, acquisitions,...

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