30 October 2019 - Post by:
The UK financial sanctions enforcer, the Office of Financial Sanctions Implementation (OFSI), announced on 28 October a fine of a UK subsidiary of an international tier 1 telecoms carrier (the Company) for indirectly facilitating international telephone calls to SyriaTel, a designated entity under EU financial sanctions on Syria, implemented by the Syria (European Union Financial Sanctions) Regulations 2012.
OFSI’s announcement does not contain much detailed information to provide context to the decision to impose a penalty. However it is clear that OFSI found that:
- indirectly facilitating the calls meant that that the Company was “repeatedly making … economic resources available indirectly to the designated entity over an extended period of time”;
- the Company had knowledge or reasonable cause to suspect it was breaching the sanctions; and
- the Company had not self-reported the breach.
The Company was fined just over £146,000 (reduced on appeal from £300,000).
Very broad definition of economic resources
The OFSI Report of Penalty states that economic resources include many tangible and intangible assets and can be provided directly or indirectly. They can, as this penalty makes clear, include indirectly facilitating international calls to a designated entity. The broad definition of economic resources should be of interest to all communications service providers. Although the facts published by the OFSI are brief, telecom carriers may not have considered facilitating calls to be the focus of the UK’s sanctions regime, nor to fall within the definition of “making economic resources available”. It highlights the importance of companies having strong sanctions screening policies and procedures in place to ensure that they do not do any unlawful business with or for persons targeted by sanctions. For more information on this decision and the OFSI penalty regime please see here.