New UK Frozen Assets Reporting Obligations - 2023
The UK Office of Financial Sanctions Implementation (OFSI) has announced a new reporting requirement in relation to frozen assets of UK designated persons, as detailed below.
UK financial sanctions legislation requires that all funds or economic resources belonging to, owned, held or controlled by UK designated persons1 must be frozen.
The legislation imposes mandatory reporting obligations on certain entities and individuals (known as Relevant Firms) to report particular information to OFSI.
To supplement the reporting obligation on “Relevant Firms”, OFSI conducts an annual frozen assets review whereby it requires all entities and individuals (whether they are Relevant Firms or not) that hold or control funds or economic resources belonging to, owned, held, or controlled by a UK designated person, to provide OFSI with a report detailing those assets.
The 2023 reporting cycle was announced by OFSI on 7 September 2023. The 2023 report must be submitted to OFSI by 10 November 2023 and include the value of all frozen assets as at close of business on 29 September 2023.
The report must include details of all “funds” or “economic resources” frozen in the UK as well as those overseas where these funds or economic resources are “subject to UK financial sanctions legislation”.
“Economic resources” is defined as “assets of every kind, whether tangible or intangible, movable or immovable, (such as goods, property, or rights) which are not funds themselves but which can be used to obtain funds, goods or services”.
“Funds” means “financial assets and benefits of every kind, including but not limited to:
- Cash, cheques, claims on money, drafts, money orders and other payment instruments
- Deposits with financial institutions or other entities, balances on accounts, debts and debt obligations
- Loans and mortgages
- Publicly and privately traded securities and debt instruments, including stocks and shares, certificates representing securities, bonds, notes, warrants, debentures and derivatives contracts
- Interest, dividends or other income on or value accruing from or generated by assets
- Credit, right of set-off, guarantees, performance bonds or other financial commitments
- Letters of credit, bills of lading, bills of sale
- Documents evidencing an interest in funds or financial resources
- Any other instrument of export-financing”.
Where the funds or economic resources relate to shares, securities, or other debt or payment instruments, the GBP value should similarly be provided in the frozen assets report.
There is no need to provide a nil return to OFSI if you do not hold or control funds or economic resources belonging to, owned, held, or controlled by a UK designated person2.
All reports need to be made using the frozen assets reporting template and then be sent by email to OFSI.
1A UK designated person is an individual, entity or body, listed under UK legislation as being subject to financial sanctions. The list of designated persons can be found on OFSI’s consolidated list of asset freeze targets here.
Note that UK financial sanctions also apply to persons and entities that are owned or controlled, directly or indirectly, by a UK designated person. Those persons or entities may not be designated in their own right, so their name may not appear on the consolidated list. However, those persons or entities are similarly the subject of UK financial sanctions.
2If you submitted a report last year (other than a nil return) and no longer hold those assets, you should submit a nil return.