HMT Issues sanctions guidance for charities

Today, the Office of Financial Sanctions Implementation (OFSI) of Her Majesty’s Treasury (HMT) issued a 11-page PDF guidance document containing guidance on sanctions compliance for charities. Here’s the press release:

New guidance has today been published by the Office of Financial Sanctions Implementation (OFSI) to help ensure compliance with financial sanctions which are designed to support UK foreign policy and national security.

OFSI works closely with charities, regulators and banks to understand common challenges faced by those operating in some of the most hostile environments.

The move was prompted by requests, notably from smaller charities, asking for clearer information on issues affecting the sector so they could ensure they complied.

Rena Lalgie, Head of OFSI, said:

We realise that charities often operate in challenging environments. This practical guidance is an important step in our efforts to raise awareness of financial sanctions and help charities and NGOs better understand their responsibilities.

We look forward to continuing to work with the Charity Commission in England and Wales, and its equivalents in Scotland and Northern Ireland, to further the UK’s sanctions and humanitarian aid policies.

Michelle Russell, Director of Investigations, Monitoring and Enforcement at The Charity Commission, said:

We have listened to feedback from our outreach work with charities operating internationally. Some charities weren’t aware that it is illegal to receive money, goods or economic resources from – or send these to – an individual or organisation subject to financial sanctions unless they have a licence or an exemption applies. Others found it challenging to navigate the rules about this. We’re pleased to have worked with OFSI on the guidance to address this knowledge gap.

We will continue to work proactively and collaboratively with international charities and other authorities to ensure that laws designed to restrict access to finances to terrorists and others are complied with, without impacting the important, often life-saving, work of many charities in high-risk areas around the world.

Further information

This guidance helps clarify what activity may be permitted under an OFSIlicence and how to apply. It also promotes various sources of information and advice available to charities and NGOs, including OFSI’s email and telephone enquiry service and the Charity Commission’s toolkit for charities and NGOs.

The new guidance document is available on OFSI’s guidance page.

Here’s the list of questions:

A. General questions about financial sanctions

1. Do financial sanctions apply to charities and non-governmental organisations (NGOs)?

2. What do I need to do if (I think) I’m dealing with a sanctioned individual or organisation?

3. Can I accept money or donations from individuals or organisations subject to financial sanctions?

4. Can I transport cash to somewhere or someone in a country subject to financial sanctions?

5. Can you give me any tips to help my charity comply with financial sanctions?

6. What should I do if I breach financial sanctions?

7. Do financial sanctions imposed by other countries apply to me?

B. Licences that allow activity prohibited by financial sanctions

1. Do charities and NGOs need to apply for licences?

2. Who applies for the licence?

3. What types of licences can I apply for?

4. Do I always need a licence for humanitarian work?

5. Do I need a licence if my humanitarian project is government-funded?

6. Can you issue humanitarian licences more quickly?

7. Do OFSI licences cover everything required to carry out humanitarian work?

8. Can I export goods for humanitarian purposes?

9. Can I apply for an OFSI licence retrospectively?

10. Do I need to think about anything else if operating in other parts of the world?

C. Dealing with financial services organisations

1. What type of information may financial services organisations require to process transactions?

2. Can I use hawala payment chains and other alternative methods?

3. What can I do if a bank won’t open an account, closes my account or blocks a transaction?