On 18 January 2017, the Policing and Crime Bill 2015-16 to 2016-17 (the “Bill“) was passed by the UK Parliament. The Bill is currently awaiting Royal Assent before it becomes law.

Once in force, Part 8 of the Bill will introduce a number of important changes to the UK financial sanctions enforcement landscape. These are as follows:

  • Increased maximum penalties for breaches of financial sanctions: the Bill provides for a maximum penalty of seven years’ imprisonment on conviction on indictment for breaches of financial sanctions, an increase from the current two years.
  • New civil monetary penalties: HM Treasury (and its sanctions arm, the Office of Financial Sanctions Implementation (“OFSI“)) is granted the power to impose civil monetary penalties of up to £1 million or 50% of the total value of the breach, whichever is greater. OFSI is currently conducting a consultation on its draft guidance on the civil monetary penalty regime, which closes on 26 January 2017 (see our earlier blog post).
  • Deferred Prosecution Agreements: where a business is charged with a criminal offence for sanctions breaches, prosecution may be automatically suspended subject to court-approved conditions (such as a financial penalty, disgorgement of profits, or introducing a compliance regime). Proceedings may be resumed if the business breaches the agreement.
  • Serious Crime Prevention Orders: the courts are granted a power to impose targeted prohibitions, restrictions on requirements to restrict or disrupt involvement in serious crime. Breach of the Order is a criminal offence, and may result in imprisonment, forfeiture of property and/or the closing down of a company.
  • Temporary UK sanctions legislation: the UK Government is now empowered to adopt temporary legislation to bridge the gap between the adoption of new sanctions by the UN and their implementation by the EU. The Bill also provides that this temporary legislation may be extended to a number of the UK’s dependent territories.

Part 8 will come into force on a date to be appointed by HM Treasury.

The latest consolidated text of the Bill (as it appeared following the Report stage in the House of Lords) is available here. Whilst the Bill was subsequently amended by both the Commons and Lords, none of those amendments affect the financial sanctions provisions.