Though not required, there can be significant benefits to submitting a voluntary self-disclosure to OFAC in the event of an apparent violation. The benefits of self-disclosure include the reduction of the base penalty amount in the event of an enforcement action. Additionally, a company’s cooperation with OFAC throughout the enforcement process may be considered a mitigating factor which could also reduce the civil penalty amount.
In the UK, financial institutions are required to report known or suspected sanctions breaches to the Office of Financial Sanctions Implementation (OFSI). Other reporting obligations may also apply in relation to sanctions breaches, including to the FCA in the case of regulated entities. For more on reporting obligations, see here. As OFSI may refer cases to law enforcement agencies, institutions should consider the potential benefits of disclosure to such agencies, even where not required.
For more on penalties and enforcement, see here.
EU sanctions require EU economic operators to immediately supply any information which would facilitate compliance with EU sanctions, such as details of accounts and amounts frozen, to the competent authorities of the Member States where they are resident or located, and to promptly transmit such information, directly or through the relevant Member States, to the Commission. They must also cooperate with the competent authorities in any verification of such information. Moreover, an economic operator who is aware that a non-listed legal person or entity is owned or controlled by a listed person or entity should inform the competent authority of the relevant Member State and the Commission either directly or through the Member State. Such reporting obligations apply without prejudice to the applicable rules concerning reporting, confidentiality and professional secrecy.
Under French law, there is no general, affirmative duty to report sanctions-related information to the authorities.
- applicable EU regulations generally provide that individuals and entities should supply to the competent authority (in France, usually the Treasury) any information which would facilitate compliance with them, such as accounts and amounts frozen;
- Article L. 562-4 of the French Monetary and Financial Code imposes sanctions-related reporting obligations on financial institutions; and
- voluntary reporting or disclosure is always an available option.
Any notification due under applicable EU sanctions shall be addressed to the Italian Ministry of Foreign Affairs and International Cooperation. In addition to the reporting obligations under EU Regulations, Italian AML provisions require institutions and entities subject to anti-money laundering obligations (e.g. banking and financial intermediaries and operators, professionals such as accountants, auditors, lawyers and notaries, certain non-financial operators and gambling services providers) to communicate to the Finance Intelligence Unit the adopted assets freeze measures, together with the amount and nature of frozen funds and economic resources. The communication must be made within 30 days of the entry into force of the relevant EU Regulations or UN Resolutions, or of the date of possession of funds by the listed subject.
In addition, the same institutions and entities shall promptly communicate to the Financial Intelligence Unit any other available information related to sanctions targets and report suspicious transactions involving individuals or entities listed under counter terrorism and counter proliferation programs. With regards to measures involving economic resources, the same communications shall be made to the Financial Police.