Office of Financial Sanctions Implementation (OFSI)
The UK Treasury office responsible for implementing financial sanctions in the United Kingdom, which can penalize without proving intent and whose decisions bear directly on the London market.
The Office of Financial Sanctions Implementation is a UK Treasury office created in March 2016 to implement financial sanctions in the United Kingdom: maintaining the list of designated persons, issuing licenses that exceptionally authorize a prohibited transaction, and pursuing breaches. Since June 15, 2022, it can impose a civil monetary penalty without having to show that the person knew or had reason to suspect a breach: liability has become strict, like the liability OFAC applies in the United States. For insurance, OFSI matters twice over. The London market, Lloyd's included, falls within its remit, so its lists bind a considerable share of global capacity in specialty, marine and cyber. And its guidance stresses that a payment to a group one of whose members is designated is an offense, whatever the stage of negotiation. A UK designation therefore changes overnight what a London syndicate's cyber cover can reimburse.
On May 7, 2024, the United Kingdom, the United States and Australia jointly designated the alleged leader of the LockBit group, Dmitry Khoroshev. From that day, any payment to LockBit exposed the insured, its negotiator and its insurer to an offense in the United Kingdom, with no need to prove they knew who the recipient was.
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