The requirement to inform HM Treasury’s Office of Financial Sanctions Implementation of known or suspected breaches of financial sanction was extended to ‘independent legal professionals‘ * and other ‘relevant businesses or professionals by ‘The European Union Financial Sanctions (Amendment of Information Provisions) Regulations 2017’, which came into force across the UK on 8 August.  

The requirement, which previously applied only to financial institutions, is for relevant professionals/businesses to report to OFSI if they have knowledge of, or reasonable cause to suspect, that

  • a person has committed an offence under the financial sanctions/assets seizure regimes
  • or is a designated power

Failure to notify OFSI is a criminal offence in certain circumstances.

OFSI will add specific guidance on the extension of the reporting obligations to its general guidance on financial sanctions.

Commenting on the regulations, the Law Society pointed out that it was ‘striking’ that they have not been subject either to consultation or parliamentary scrutiny, while the explanatory notes say that no impact assessment was necessary because HM Treasury claims the impact on business will be negligible.

The LS has also asked OFSI for more practical guidance on when the reporting obligation actually arises.

It also wants the guidance to make it clear that firms are obliged neither to undertake further investigations for the purpose of reporting to OFSI nor to report privileged information.

* The regulations define an independent legal professional as “a firm or sole practitioner who by way of business provides legal or notarial services to other persons”.