OFSI offers guidance to charities on financial sanctions

On November 13, 2020, the Office of Financial Sanctions Implementation (OFSI) partnered with the Charity Commission of England and Wales (CCEW) to advise charities on how to understand and comply with financial sanctions, and issued guidance points describing four facts that all charities should know.  

First, charities should be aware that financial sanctions exist, and the devastating consequences that could result from non-compliance with sanctions laws, with penalties ranging from civil monetary penalties to criminal offenses that could result in up to 7 years in prison.  

Second, charities are responsible for determining whether the individuals, organizations and countries they deal with are impacted by financial sanctions.  OFSI offers guidance on due diligence and consolidated lists on its website, that were developed to help charities and other companies identify and manage sanctions risks, before projects begin.

Third, some sanction regulations are written with exceptions that allow humanitarian activities to continue in certain circumstances.  In these situations, charities must first obtain a license from OFSI, usually a humanitarian license, in order to comply with sanctions regulations.  While OFSI tries to prioritize humanitarian applications, it urged charities to apply for licenses at least four weeks before they are needed.

Finally, Charities, like all other companies, are required by law to report any suspected sanctions violations as soon as possible.  According to the CCEW, this is the most common non-compliance issue that charities face.  If a charity suspects that they are dealing with an person or entity subject to sanctions, it must report the activity to OFSI and CCEW, freeze the funds and assets immediately, and refuse to make economic resources available to suspected violators.

OFSI also encourages charities to use their Factsheet for Charities and their Compliance Toolkit developed specifically for charities, to offer tips, examples and detailed guidance on how to comply with financial sanctions.

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