The UK’s 2023-26 Economic Crime Plan and Its Impact on Sanctions

The U.K. government recently published its Economic Crime Plan 2 (the plan) on 30 March 2023, which aims to “improve the system-wide response to economic crime through enhanced cooperation between government, law enforcement, supervisory agencies and the private sector.” The plan will deliver 475 new financial crime investigators spread across intelligence, enforcement and asset recovery operations at key agencies such as the National Crime Agency (NCA), the Crown Prosecution Service, and the Regional Organised Crime Units with a view to detecting and recovering an additional £1 billion in criminal assets over the next 10 years. A key aspect of the plan is bolstering the government’s capability for enforcement of the U.K.’s unprecedented package of sanctions in response to Russia’s invasion of Ukraine.

The plan emphasizes the government’s commitment to engaging with the private sector to tackle risks of sanctions evasion, as well as emerging risks that may warrant the imposition of sanctions. The plan also includes specific actions assigned to the Office of Financial Sanctions (OFSI), namely:

1. The delivery of a published assessment of sectoral threats and the identification of vulnerabilities relating to financial sanctions.
2. The enhancement of OFSI’s methods of engagement with public stakeholders and the private sector.
3. An increase in information sharing of suspected breach cases between statutory supervisors including the Financial Conduct Authority and OFSI.
4. A review and expansion, where necessary, of OFSI’s enforcement guidance, licensing framework and future legislative needs.
5. The commencement of formal information exchange with overseas partners to determine the most effective way to share information, exchange views and develop key partnerships.

The government will expand the capacity of the Combatting Kleptocracy Cell – the NCA’s specialised unit that investigates corruption and politically exposed persons. The expanded unit will support cross-government work on criminal breaches of sanctions.

The plan also states that the U.K., alongside other countries, is actively considering all possible options for seizing assets in the U.K. that could be used to remedy the harms caused in Ukraine. In that regard, the plan acknowledges that this is a novel and exploratory area. Currently, seizure of U.K.-based foreign assets can only occur through the use of powers in the Proceeds of Crime Act 2002 to deal with assets with links to criminality or unlawful conduct.

The government further commits to identifying and disrupting “enablers” such as “bad actors” in the trust and company and service providers, real estate, legal and accountancy and other sectors who are knowingly complicit in assisting corrupt elites to move their finances, undertake high-end money laundering, and evade sanctions. In that regard, the government plans to introduce measures to combat Strategic Lawsuits Against Public Participation in the next Anti-Corruption Strategy.

It remains to be seen whether the various initiatives outlined in the plan will receive the political and financial support necessary for implementation, but the plan makes clear that the government at least has an intention to focus more vigorously on enforcement of sanctions, as well as on tackling evasion.