Each year, HM Treasury requests reports on frozen assets to update their records. Entities or individuals controlling funds or economic resources subject to UK financial sanctions must submit a report to OFSI by 11November 2024, detailing the value of these assets as of 30 September 2024. A reporting template is available on the GOV.UK website. Only assets frozen under UK sanctions need to be reported.

If no frozen assets are held, there is no need to submit a report, unless a report was submitted the previous year, in which case a nil return is required if those assets are no longer held.

In addition to the annual reporting, organisations are required to continuously monitor and report any newly frozen assets to OFSI immediately. This includes reviewing accounts or assets related to designated persons, freezing them as required and ensuring they are not accessed or used unless authorised by OFSI.

Non-compliance with financial sanctions legislation is a serious offence and may result in penalties.

Following the implementation of the Russia (Sanctions) (EU Exit) (Amendment) (No.4) Regulations 2023 on 26 December 2023, regulation 70A of the Russia (Sanctions) (EU Exit) Regulations 2019, has mandated the following reporting obligations, as relevant:

• Individuals designated under the asset freeze must disclose the value and nature of any funds or economic resources they own, hold, or control in the UK or as UK persons. This must be done within 10 weeks of the legislation taking effect or the designation date, whichever is later. Any newly acquired or disposed assets must be reported to HM Treasury/OFSI promptly.
• Relevant firms must report any funds or economic resources they hold for entities prohibited from receiving certain financial services under Regulation 18A(1). These reports must be made to HM Treasury/OFSI as soon as practicable and on an annual basis.

Any change in the nature, value, or location of funds must also be reported as soon as possible. Failure to comply or providing false information knowingly or recklessly constitutes an offence, punishable under sanctions law.

The reporting requirements under regulation 70A above also apply in the UKOTs such as the BVI, Cayman Islands, and Bermuda. These were extended to UKOT law by virtue of the Russia (Sanctions) (Overseas Territories) (Amendment) Order 2024 (see further our earlier blog here).

The OFSI guidance above will therefore be relevant to UKOT firms subject to the disclosure obligation.

The OFSI’s Financial Sanctions Notice can be found here.