UK Needs Improved Sanctions Guidance, Outreach After Brexit, Task Force Says
The United Kingdom must improve its outreach and guidance to the private sector to make sure its post-Brexit sanctions regime is effective, a task force organized by the Royal United Services Institute said in a September report. The task force, composed of former U.K. sanctions officials, policy experts and private sector representatives, said Britain should review and increase staffing within its sanctions regimes and consider adopting some of the sanctions guidance tools provided by the U.S. Treasury’s Office of Foreign Assets Control, RUSI said.
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The success of Britain's sanctions policy after Brexit will depend on its compliance among industries, the report said, which currently falls under the responsibility of the Office of Financial Sanctions Implementation. But OFSI’s performance has been “repeatedly called into question” by the private sector and is “falling short” of its mission to work closely “with law enforcement to help ensure that financial sanctions are properly understood, implemented and enforced,” RUSI said. The most common complaint is the lack of guidance issued by OFSI, RUSI said, which falls short of OFAC, its U.S. counterpart.
“Having created OFSI, the private sector expected more valuable, effective and timely guidance from the government,” the report said. “Inevitably -- and perhaps unfairly -- OFSI’s performance in this field is often compared to that of US OFAC.”
When companies ask OFSI for sanctions guidance, the office’s response is usually: “seek legal advice,” RUSI said. The report said OFSI’s restrained responses are “not optimal in the context of EU sanctions regimes … and will clearly not be sufficient once the UK starts diverging from EU sanctions approaches.” The UK needs a “concerted effort” to make sure its private sector understands the scope of its sanctions regimes.
Although OFSI touted its public engagement in a recent annual review, saying it spoke at more than 60 public events, RUSI said the speeches are often “superficial and lack the granular detail that the private sector requires.” OFSI should develop a “formal sanctions enquiry response model” and even consider copying OFAC’s Frequently Asked Questions webpage, the report said.
RUSI also said OFAC’s enforcement actions have “galvanised greater focus” on sanctions compliance in the U.S., something OFSI can learn from. “OFSI needs to move quickly to demonstrate that, where necessary, it has teeth,” the report said.
OFSI is also “lagging” in licensing procedures, the report said, calling the process “highly frustrating.” The report again pointed to OFAC, saying its “regular inclusion of general licenses for humanitarian activity, food, medicine and medical devices in its sanctions regulations should be instructive.”