On 15 March 2022, the Economic Crime (Transparency and Enforcement) Act 2022 (“the Act”) received royal assent. Having been on the political agenda since 2016, the Act was fast-tracked in response to Russia’s invasion of Ukraine.
The Act contains three key parts:
- Part 1: Registration of Overseas Entities. In March 2022, we reported on the inclusion of the Register of Overseas Entities as part of the wide package of measures in the Act.
- Part 2: Unexplained Wealth Orders (amendments to the existing regime)
- Part 3: Sanctions (amendments to the existing UK sanctions regime)
On 15 June 2022, Part 3 of the Act came into force. Its provisions include an amendment to Section 146 of The Policing and Crime Act 2017, which formerly provided that before imposing a monetary penalty for breach of financial sanctions legislation, the Office of Financial Sanctions Implementation (“OFSI”) must prove that the subject of the penalty knew or had reasonable cause to suspect that they were in breach of a financial sanction.
Under the new rules, OFSI may now issue civil monetary penalties on a strict liability basis. Its updated guidance clarifies that this change only applies to civil liability and that the imposition of a monetary penalty “is not relevant to any assessment of whether a criminal offence has been committed under sanctions regulations”.
OFSI’s updated guidance is available here: Microsoft Word - 070622 Monetary Penalty Guidance - published (publishing.service.gov.uk)