The OFSI, the HM Treasury department responsible for financial sanctions implementation in the UK, published (click here) its Annual Review for the 2023-24 fiscal year.
What is it about?
- The OFSI’s 29-page report (click here) provides an overview of OFSI’s activities over the past financial year running from 1 April 2023 to 31 March 2024. The report provides useful statistics and insights into the OFSI’s activities through a lens of market engagement, sanctions enhancements and enforcement, with the G7+ Oil Price Cap (OPC) featuring strongly. According to the report, over the fiscal year, 564 designated persons were added to the consolidated list. The number of those subject to financial sanctions (as at the end of March 2024) included 3,463 designated individuals, 853 entities, and 15 ships, totalling 4,331 entries across 35 regimes. Of this total, 2,001 individuals and entities fell under the Russia sanctions regime;
- The report also highlights that during the period in question, the OFSI increased its resourcing levels from roughly 100 to 135 full time equivalents (FTE). A sharp increase, particularly considering the total complement rested at 45 FTEs at the time of Russia’s invasion of Ukraine in 2022. Most of this resourcing has gone toward the licensing and enforcement teams. The report also espouses investments in new tools and processes, such as advanced data analytics, cryptocurrency investigation capabilities, and access to specialist platforms for corporate record and data sets;
- From an enforcement perspective (see page-19 of the report as numbered), the OFSI tripled the number of closed cases from the previous year with a total of 242 (vs 74 in the prior period). Of the 242 closed cases, the vast majority were either closed as non-breaches, or with only warnings issued. Only a single enforcement action resulted. A total of 396 new cases over the period were initiated – a new record for the OFSI. Notably 288 of these were self-reported and 347 of them were related to Russia. The OFSI recorded 23 suspected breaches of the OPC over the period, 14 of which involved the energy sector directly, with the remainder spread across financial services, crypto and other ancillary sectors.
Regarding the OPC, the report outlines several other enlightening details including:
- The OFSI has worked with Department for Transport (DfT) and the Ministry of Defence (MoD) in setting up the Sanctions Assessment Team (SAT) within the Joint Maritime Security Centre (JMSC);
- The JMSC is the UK government’s centre of excellence for maritime security - the expertise provided by the SAT supports OFSI’s monitoring and enforcement of the OPC including reporting into the behaviours exhibited by vessels whilst transporting Russian oil;
- OFSI’s priorities regarding the OPC are to disrupt circumvention of the cap, and to take enforcement action where appropriate to help increase industry compliance;
- Most of the suspected OPC breaches reported to OFSI involved suspicious behaviour by non-UK entities and related to shipments of oil and oil products in which UK entities were involved, mostly in the provision of maritime services (presumably shipping);
- According to the report, in most of the cases above, the UK entities involved did not have direct visibility of the prices paid for the oil or oil products.
