The UK’s sanctions enforcement office has been trying to introduce the “most extraordinary package of sanctions ever implemented” in UK history with a group of just 70 staff, its director has admitted.
The head of the Office of Financial Sanctions Implementation (OFSI), Giles Thomson, told MPs on the Treasury committee on Wednesday that his small team had been expected to oversee potential breaches of Russia-related sanctions despite the number of Moscow-related designations having surged from about 220 to more than 1,400 after the invasion of Ukraine.
A director added that only six to seven staff were ever available to help companies with specific queries over how to implement sanctions in their line of work.
The OFSI’s poor resourcing is in stark contrast to its US counterpart, the Office of Foreign Assets Control, which operates with about 300 employees.
Thomson said the watchdog had started with even fewer staff – about 45 employees – before the Ukrainian crisis. Although the chancellor, Rishi Sunak, had allowed the OFSI to more than double its staff, it is only expected to reach 100 employees by April next year.
Thomson also revealed that the OFSI, which was originally launched by former chancellor George Osborne in 2016, had not yet set up a whistleblower line and had primarily relied on self-reporting by companies involved in risky transactions to build its cases against offending firms.
Details of the OFSI’s poor resourcing are likely to fuel further criticism of the effectiveness of the UK’s sanctions regime.
The body, overseen by the Treasury, came under fire in February for having issued just six fines worth a combined £21m since its founding. Meanwhile, US authorities have issued 87 fines worth more than $1.5bn (£1.1bn) in the past five years.
While it would fall on the National Crime Agency rather than the OFSI to pursue criminal charges relating to breaches, Thomson confirmed there “hasn’t been a criminal prosecution to date for sanctions offences”.
“It’s been hard work,” the OFSI director told MPs. “There’s no denying that we’ve had to resource up and scale up what we do in terms of the volume and complexity pretty quickly.”
He said part of the problem was that both private companies and other public bodies were competing for the same pool of sanctions and financial crime experts. At the same time, the OFSI itself was struggling to scale up, since it relied on existing staff to train up new recruits, all while overseeing the implementation of sanctions by UK firms.
Thomson said he was proud of what the team had achieved so far but admitted there was “more we can do”.
“We’re conscious that there’s always more guidance we can provide; there’s always a better service that we can provide.”
