In both the US and UK, enforcement authorities will often learn of a potential sanctions violation through a voluntary self-disclosure submitted by the company or by another involved party. In the US, OFAC may also learn of potential violations through information obtained by other US government agencies, including the Departments of State and Commerce and US intelligence agencies. In the US, OFAC may issue subpoenas for additional information. If OFAC determines that a referral to the Department of Justice for a potential criminal investigation or prosecution is appropriate, investigative tools typically used by US law enforcement are available. For more on that, see here and here.
In France, after criminal proceedings are initiated by the Ministry of Economy, which can learn of potential sanctions violations through any means (including a voluntary self-disclosure submitted by the company, reports from customs officials or other law enforcement officers, or denunciation by a third party), the offense will be prosecuted in accordance with the rules of the French Code of Criminal Procedure, in the same way as other criminal offenses are prosecuted.
In the UK, in addition to information received through reporting, OFSI has powers to require the production of documents or the provision of information, including in order to:
- establish the extent of funds and economic resources belonging to, owned, held or controlled by or on behalf of a designated person;
- obtain information concerning any disposal of such funds or economic resources;
- monitor compliance or detect evasion; and
- obtain evidence of the commission of an offense.
For more, see HM Treasury Office of Financial Sanctions Implementation, Financial Sanctions Guidance (Dec 2020), available here.
OFSI can also refer cases to law enforcement agencies for investigation (and possible prosecution), including HMRC and the SFO. HMRC has the power to apply for orders requiring information to be produced, apply for search warrants, make arrests, and search suspects and premises following arrest. These powers are conferred by the Police and Criminal Evidence Act 1984, amended by the Finance Act 2007. The SFO has the power to issue notices compelling documents and testimony, as described more fully in the Investigative Tools – Documents and Investigative Tools – Testimony.
With respect to the regulated sector, the FCA has the power to issue notices to authorized persons requiring them to provide specified information or produce specified documents.1 The FCA may also seek voluntary productions in the first instance, without issuing a formal information request. Although firms are not obliged by statute to respond to voluntary requests, Principle 11 of the FCA’s Principles for Businesses requires them to deal with the FCA “in an open and cooperative way” and to “disclose to the FCA appropriately anything relating to the firm of which that regulator would reasonably expect notice.”
Once an investigation has been formally initiated, the FCA’s powers to require information broaden. Investigators are empowered to require the subject of an investigation (or a person connected to that person) to produce documents, attend an interview and answer questions, or otherwise provide information required by the investigator, so long as the documents, testimony, or information sought are reasonably considered relevant to the investigation.2 The FCA may also seek testimony and documents from persons who are not subject to investigation (or connected with someone subject to investigation) where “necessary or expedient for the purposes of the investigation.”3
1 Financial Services and Markets Act (FSMA), c. 8, § 165 (UK).
2 FSMA § 171.
3 FSMA § 172.