Business Crime & Fraud
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The UK law concerning sanctions falls into two main categories: trade sanctions, which prohibit or restrict the movement of goods and services (for more detail about our experience in trade sanctions, please take a look at our page on export controls and trade controls) and financial sanctions, which prohibit or restrict the movement of money and other economic benefits.
Over the past 15 years, the United Nations and European Union have increasingly turned to financial sanctions as a weapon to combat persons and organisations (so-called “designated persons”) whose actions are considered to be politically unacceptable. These financial sanctions include asset freezes, targeted measures that restrict the provision of economic benefits and the requirement to notify or seek the consent of the Office of Financial Sanctions Implementation (OFSI), which is part of HM Treasury (HMT).
The use of financial sanctions has increased dramatically since Russia’s invasion of Ukraine in 2022. They have become a key foreign policy tool with far-reaching repercussions for businesses that have even the most indirect or tenuous links with the Russian state.
We have particular expertise where a business learns that it may have breached financial sanctions, or that it may be owned or controlled by a designated person. It may discover these problems in a variety of ways: it could be contacted by OFSI (or even the National Crime Agency (NCA)), it could find that its banking facilities have been frozen or it could discover concerns through an internal inquiry. The discovery of these problems is enormously serious. Criminal liability arises if sanctions are breached knowingly. Civil liability – leading to enforcement action and potentially large fines – arises even if they are breached innocently.
Banks, insurance companies and other FCA regulated entities will often take sophisticated measures to stay abreast of the latest developments in financial sanctions. There are many law firms in the UK which provide compliance advice about these risks. What makes Corker Binning stand out from these firms is that we have practical experience of advising businesses that learn that they may have breached a particular financial sanction. Whilst disclosing the breach voluntarily to OFSI may often be the wisest course of action, such disclosures need to be handled very carefully to reduce the risk of prosecution. At Corker Binning, we are familiar with the legal and practical issues that arise from this difficult decision. We have helped a number of businesses avoid prosecution.
We also have expertise where a business is notified by OFSI and/or the National Crime Agency (NCA)/police that it may have committed a “sanctions busting” criminal offence. We advise from the initial investigatory stage (including interviews under caution), to negotiating with the prosecutor to achieve a non-prosecution outcome, as well as defending charges in the criminal courts. Similarly, we are able to advise directors or senior employees who may be the subject of an internal investigation by a financial institution or company into suspected misconduct.
Finally, we have experience in de-listing applications to the Foreign, Commonwealth and Development Office (FCDO) where an individual or business has been designated unlawfully. These applications require a highly technical analysis of whether the designation satisfies the criteria and purposes of the relevant sanctioning regime, often involving expert evidence.
- Advising a number of UK and European companies in the financial services sector on whether (a) they are owned or controlled by designated persons, and/or (b) particular transactions would breach financial sanctions, and making associated representations to OFSI to obtain “comfort letters” to this effect, thereby enabling them to restore banking facilities that had been frozen, and conduct legitimate business.
- Advising two high-profile individuals on challenging their designation by the UK Government, including bring applications for de-listing to the FCDO.
- Representing the directors of an overseas company in a cross-border investigation into sanctions busting allegedly committed by the private office of a prominent Russian national.
- Making applications to OFSI to secure the lawful release of funds in relation to frozen assets (including cultural property owned or controlled by designated persons) for urgent reasons.
- Advising an individual and an unrelated business on securing the release of transportation assets impounded by the Department of Transport.