‘Sanctions Sins: Information Offences’

This article is based on Markus Findlay’s talk at Doughty Street Chambers’ Annual Sanctions Enforcement Seminar on 7 May 2025. A video recording of this event is available here.

Introduction

When it comes to engagement with sanctions regulators like the UK Office of Financial Sanctions Implementation (OFSI) or US Office of Foreign Assets Control (OFAC), there are three “deadly sins”:

• Silence 
• Sloppiness 
• Stupidity 

In terms of enforcement, sanctions regulators rely not only on their own investigations and the self-reporting of breaches, but also on responses to Requests for Information (RFIs). These may be issued to both Designated Persons (DPs), namely those on the sanctions list, or those suspected of dealings with them. Failure to comply with RFIs can lead to both civil and criminal enforcement. 

This article focuses exclusively on the criminal enforcement of financial sanctions through the prosecution of information offences. It is worth noting that similar information offences also arise with other types of sanctions, such as trade sanctions.

Overview of Legal Framework

Section 17(4) Sanctions and Money Laundering Act 2018 (SAMLA) enables sanctions regulations to create criminal offences which help enforce sanctions. 

There are currently 35 UK sanctions regimes.[1] There are 27 country-based sanctions regimes (from the Afghanistan sanctions regime to the Zimbabwe sanctions regime) and 8 thematic sanctions regimes which include Counter-Terrorism sanctions and Global Human Rights sanctions. There are information offences in all 35 of the UK’s sanctions regimes. 

This article will not examine the related category of licensing offences (failure to comply with conditions etc.), reporting offences (failure to inform OFSI of breaches), or confidentiality offences (disclosing information deemed confidential by the Secretary of State). 

There are four types of information offences which include both strict liability and mens rea offences. These are as follows:

• Failing to comply with OFSI’s RFI or the production of documents without a reasonable excuse (AKA silence). 
• Knowingly or recklessly providing materially false information or documentation in response to a request for information (AKA sloppiness). 
• Destroying, mutilating, defacing, concealing or removing any document with intent to evade requirements under an RFI or documents (AKA silliness). 
• Otherwise intentionally obstructing HM Treasury (in the form of OFSI) in the exercise of its powers to request information and the production of documents (AKA silliness). 

In the Russia (Sanctions) (EU Exit) Regulations 2019, OFSI’s power to make an RFI is contained within regulation 72 and the offences themselves are contained within regulation 74.

These offences are summary only. The maximum sentence a Magistrates’ Court can impose under regulation 80(4)(a) is 6 months’ imprisonment and/or a fine. Notably, this maximum sentence was not increased to 12 months with the change to the Magistrates’ Court sentencing powers on 18 November 2024.[2] In contrast, the maximum sentence for other sanctions offences did increase with this change in the law (e.g. licensing offences under regulation 80(1)(b)).

Failure to Comply with an Information Request (AKA silence)

What might constitute a reasonable excuse and therefore provide a defence to this offence? There is no identifiable sanctions-related case law on this point but here are some applicable principles:

• First, there are no references to legal and evidential burdens of proof in the legislation. However, Courts might follow R. v Charles (Chuks Emmanuel) [2009] EWCA Crim 1570 which concerned the interpretation of the Crime and Disorder Act 1998 and confirmed at [16] that the legal burden is on the Crown and the evidential burden is on the Defendant where they have raised the reasonable excuse defence. 
• Second, what is reasonable depends on the particular circumstances of the case and may include factors such as the Defendant’s age, background, associates, way of life, and mental illness (see: R v H [2009] UKHL 13 at [81]). Note however that mental illness does not of itself, make an unreasonable excuse reasonable but may be a factor for the jury to take into account (see: R v H at [88]). 
• Third, given the strong public policy interest in enforcing sanctions and the Courts’ deference to the State in post-SAMLA decisions, the definition of reasonable excuse is likely to be construed narrowly. 

Provision of False Information (AKA sloppiness)

What does “knowingly or recklessly” mean in this context? Derry v Peek (1889) 14 App Cas 337 at 374 defined the related notion of fraud as information provided “without belief in its truth” or “careless whether it be true or false”. 

Destroying Documents with Intent to Evade Requirements (AKA silliness)

The mental element of this offence is perhaps akin to the fraudulent evasion of a duty under section 170 of Customs and Excise Management Act 1979. Here proof of knowledge is required i.e. a specific intent to be knowingly concerned in a fraudulent evasion of a prohibition and, crucially, recklessness is not enough (see: Archbold Criminal Pleading Evidence and Practice 2025 Ed at 30-240 and Panayi (No.2) and Karte [1989] 1 W.L.R. 187, CA at p. 192). 

Therefore, a person or entity must (a) be aware of a requirement to provide OFSI with information, (b) knowingly destroy this information, and (c) do so with the purpose of evading OFSI’s requirements. 

Intentionally Obstructing OFSI (AKA silliness)

This offence is broader in scope and may encompass conduct captured by the previous three information offences or perhaps some form of exceptionally unreasonable engagement with OFSI in response to a request for information. 

How Are These Offences Prosecuted? 

In the UK, the sequence is broadly as follows:

• Depending on the sanctions regime, either the appropriate Minister from the Foreign, Commonwealth & Development Office (FCDO) or OFSI designates a DP.[3] 
• The DP receives an Asset Freezing – Financial Questionnaire from OFSI in the post or via the police with a deadline for completion and return. 
• OFSI sends reminder letters and/or civil breach letters. 
• The police invite the DP to attend a voluntary interview or simply arrests the DP. 
• The DP is charged with an information offence. 
• OFSI refers the case to the National Crime Agency (NCA) or the Crown Prosecution Service (CPS) for prosecution. 
• The DP appears before the Magistrates’ Court (likely Westminster Magistrates’ Court) for their First Appearance where the DP will enter either a guilty or not guilty plea.
• The DP attends the Magistrates’ Court once again for their trial or sentence depending on the plea at the First Appearance.

UK Case Study – Svarog

On 8 May 2025, the day after this talk, OFSI published a press release confirming it had imposed a £5,000 penalty in relation to an information offence committed by a UK-registered shipping company, Svarog Shipping & Trading Company Limited (Svarog). This was the first penalty of its kind. OFSI stated that Svarog failed to respond to its RFI by the stated deadline and failed to provide a reasonable excuse for doing so (AKA silence). 

A notable feature of the Svarog case is that it involved an RFI issued to a non-DP. Svarog was not on the sanctions list at the time of this enforcement action, and, at the time of writing, this remains the case. OFSI’s RFI to Svarog was issued in the context of a wider investigation concerning the DP, Sovcomflot. OFSI learned that Svarog had transacted with a Sovcomflot subsidiary but ultimately concluded that Svarog had not breached financial sanctions – other than by failing to respond to the RFI. This shows that OFSI can issue RFIs to any party and that criminal liability for information offences is not limited to DPs. 

Whilst OFSI stated that Svarog committed a criminal offence, namely a breach of the aforementioned regulation 74, the punishment was a monetary penalty imposed by OFSI under section 146 of Policing and Crime Act 2017 (a civil power) and not a fine imposed by the Magistrates’ Court under regulation 80(4)(a) (a criminal power). OFSI imposes civil monetary penalties where it is satisfied of a breach of sanctions on the balance of probabilities (the civil standard) and not where it is sure (the criminal standard). Indeed, OFSI has no criminal enforcement powers. As the prosecution sequence above shows, OFSI refers criminal cases to the NCA or CPS.

In short, Svarog is an example of OFSI taking action in respect of a criminal offence, using its civil enforcement powers. Further, in doing so, OFSI has arguably made a pronouncement on criminal liability without there having been a conviction. For reasons of expediency and to boost its profile as a regulator, OFSI may adopt this quasi-criminal enforcement strategy in future cases. 

USA Case Studies – Southern Cross Aviation & DNI Express Shipping

Two OFAC enforcement notices from 8 August 2019 offer useful insight into the type of conduct that might lead to the prosecution of information offences in the UK.

OFAC issued Florida-based company Southern Cross Aviation (SCA) with a civil reporting violation for failing to provide complete information around the sale of helicopters to Iran.

OFAC considered the following to be aggravating factors: 

• Southern Cross demonstrated reckless disregard for its US sanctions requirements by failing to provide accurate and complete information in response to an OFAC Administrative Subpoena (AKA silence).
• Southern Cross had actual knowledge or reason to know of the conduct that led to the violation in this instance (AKA sloppiness).
• Southern Cross did not fully cooperate with OFAC’s investigation (AKA stupidity). 

In a separate case, OFAC issued Virginia-based company DNI Express Shipping with a civil reporting violation for providing it with contradictory and misleading information in relation to the shipment of farm equipment to Sudan. OFAC deemed the following to be aggravating factors: 

• Showed reckless disregard for its US sanctions requirements by failing to provide accurate and complete information in response to an OFAC Administrative Subpoena (AKA sloppiness). 
• Provided false, materially inaccurate, materially incomplete, and misleading information regarding actual shipment of goods to Sudan (AKA sloppiness and stupidity).
• Failed to correct original false responses and instead confirmed them (AKA sloppiness).
• Did not fully cooperate with OFAC’s investigation (AKA stupidity).

Conclusion

Recent enforcement action in relation to information offences signals that regulators like OFSI will not tolerate the “deadly sins” of silence, sloppiness, and silliness. Indeed, as this article has shown, they may even stretch their enforcement mandates to illustrate the level of engagement they expect from DPs and their associates. Taken together, OFSI and OFAC publications suggest that the following practical measures can significantly reduce the risk of prosecution for information offences:

1. Proactive and candid cooperation with a regulator’s investigations. 
2. Diligent reviews of information and documentation in response to an RFI. 
3. Accurate, complete and timely responses to an RFI. 
4. The instigation of effective communication and monitoring systems. 
5. Consideration of other compliance and reporting obligations.

As the enforcement landscape evolves, firms and individuals should expect greater scrutiny from regulators. For them, silence is far from golden, it can be criminal. 

Markus Findlay is a barrister at Doughty Street Chambers. He is a former OFSI secondee and is instructed to defend in the first prosecution of an information offence in the criminal courts of England and Wales. 
 

[1] Not including the non-statutory guidance on UK arms embargo on Armenia and Azerbaijan and UK arms embargo on mainland China and Hong Kong. 

[2] See the Sentencing Act 2020 (Magistrates’ Court Sentencing Powers) (Amendment) Regulations 2024.

[3] Regulation 5 of The Russia (Sanctions) (EU Exit) Regulations 2019 confirms that it is the Secretary of State (for the FCDO) who has the power to designate persons whereas as Regulation 5 of The Counter-Terrorism (Sanctions) (EU Exit) Regulations 2019 confirms that it is the Treasury (in OFSI) that has this role.