OFSI imposes its first monetary penalty of 2022


On 16 June 2022 the Office of Financial Sanctions Implementation (OFSI) imposed a £15,000 penalty on UK company Tracerco Limited (Tracerco) for violations of the Syria sanctions regime by making funds available for the benefit of a designated person. Tracerco provides measuring products and services to the oil and gas industry.

Between May 2017 and August 2018, Tracerco made two payments totalling £2,956.43 to a UAE travel agency for flights on Syrian Arab Airlines, which is on the UK designations list. The flights were to take an employee home and formed part of the employee's remuneration package.

Tracerco made a voluntary disclosure to OFSI which reduced the penalty by 50% in line with OFSI's guidance on assessment of monetary penalties.

Key Takeaways

The Note on Compliance in OFSI's report on the imposition of this penalty includes useful points for companies to consider:

  • UK sanctions will apply to the actions of companies abroad if the company has a UK nexus.
  • Companies must carry out sanctions due diligence not only on customers and suppliers, but on all transactions that they undertake, such as employee remuneration.
  • It is not sufficient for any company to rely on a third party to undertake sanctions checks on their behalf. The risk of reliance on a third party for sanctions checks is heightened when the third party is not a UK company and therefore not subject to UK sanctions.

This is the first monetary penalty imposed by OFSI in 2022. We expect to see more sanctions enforcement actions in the coming months as the UK's sanctions regime is broadened in response to the crisis in Ukraine, and as we begin to see the effects of OFSI's new powers to impose civil monetary penalties for sanctions breaches on a strict liability basis.

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