What is OFSI?
OFSI is part of HM Treasury and is responsible for implementing and enforcing the UK's financial sanctions and terrorist financing regimes. OFSI plays a key role in national security and financial crime prevention efforts, implementing sanctions aimed at preventing the proliferation of weapons of mass destruction, counter-terrorism and other national and international security objectives.
OFSI Tasks
OFSI works with businesses and individuals to ensure they understand and comply with financial sanctions. It provides licences to carry out transactions that would otherwise be prohibited by sanctions and maintains a sanctions list, allowing individuals and businesses to check that they are not in breach of sanctions by dealing with certain individuals or entities.
How does OFSI affect us?
As a result of the unprecedented level of sanctions against the Russian Federation and the Republic of Belarus, many organisations and individuals are at serious risk of having their SWIFT transfers blocked. It is particularly important to highlight that banks operating under UK jurisdiction monitor transactions in all currencies when processing transfers. This applies to both international and domestic transactions, including those where both parties to the transaction are located in Russia. The consequence of this is that any transactions in which the parties – whether intermediary banks, recipients or senders of payments (or their namesakes) - are on the UK sanctions list are blocked. Furthermore, UK banks sometimes require an OFAC licence to release funds, based on OFAC's executive orders, highlighting the close interaction between the US and UK regulatory regimes.
Blocking process:
Identification of sanctioned entities:
Sanctions Lists: OFSI maintains and updates sanctions lists that include individuals, entities, organisations and countries subject to financial sanctions. These lists contain identifying information to assist financial institutions and companies in identifying sanctioned entities.
Responsibilities of financial institutions:
Banks and other financial institutions are required to conduct checks on their customers and transactions to ensure they comply with OFSI sanctions lists.
Blocking and reporting:
- Freezing of funds and assets: Upon discovery that a transaction is associated with an entity on the sanctions list, the financial institution must immediately freeze those funds and prevent any further transactions.
- Reporting to OFSI: Financial institutions are required to notify OFSI of any funds blocked, providing all relevant information about the blocked transaction and the sanctioned parties.
Check and unlock:
- Unblocking requests: Entities whose funds have been blocked can apply to OFSI to have their case reviewed. This may happen if the entity believes they were included in the list in error or their circumstances have changed.
- OFSI Decision: OFSI will review the evidence provided and may decide to release the funds if it is confirmed that the blocking was made in error or the sanctions decision has been changed to issue a licence to release the transfer.
What will be needed to unblock the translation?
To apply for a license, the following documents will be required:
- Bank forms MT-103 and MT-199, all requests and correspondence with the bank. (they must be requested from the sending bank).
- All documents related to the transfer (transaction), such as: contract, invoice, lease agreement, etc.
- Passport, residence permit (for individuals), extract from the Unified State Register of Legal Entities, Taxpayer Identification Number (TIN), beneficiary’s passport (for legal entities).
- Details in an unauthorized bank.
- A little patience and the key idea is that you are not in the worst situation, the money is in a reliable currency and sooner or later it will return.
- Sign up for a consultationand get qualified help, or try to figure it out yourself.