On 25 February 2019, OFSI announced that it had imposed its first civil monetary penalty, almost two years after it gained the power to impose fines under the Policing and Crime Act 2017. The GBP 5,000 penalty was imposed on R. Raphael & Sons plc, one of the UK’s oldest independent private lenders, for processing a GBP 200 transfer to a sanctioned associate of the former Egyptian President Hosni Mubarak, in breach of the Egypt (Asset-Freezing) Regulations 2011 (which implement Council Regulation (EU) No 270/2011 in the UK).
This penalty was imposed because OFSI was satisfied that, on the balance of probabilities, Raphaels Bank breached a prohibition under financial sanctions legislation, and knew or had reasonable cause to suspect that it was in breach. According to OFSI’s penalty notice (here), the initial penalty of GBP 10,000 was discounted by 50%, on account of Raphaels Bank’s voluntary disclosure and cooperation. This also indicates that, in accordance with its Guidance on Monetary Penalties for Breaches of Financial Sanctions (here), OFSI categorised the breach as “serious”, rather than “most serious”.
OFSI has not yet published further details of its case assessment and penalty calculation, but has noted that “[e]nquiries remain ongoing into other aspects of this breach which do not concern Raphaels Bank”, and that a fuller summary of the breach may be published following the conclusion of such enquiries.