In both cases, they are international sanctions which have become a fundamental element in the field of contemporary international relations. These are coercive measures that are applied against States, non-state entities or individuals that pose a threat to international peace and security. The objectives sought are to modify the behavior of an actor, to reduce their capacity to maneuver or weaken their position, and to publicly denounce those actors that pose a threat to international peace and security. Such sanctions usually work as a preventive method and to prevent the use of armed forces. Today, there are three main bodies in the imposition of sanctions: the United Nations, the European Union and the OSCE (Organization for Security and Cooperation in Europe). As mentioned in the UNSC blog, Chapter VII of the United Nations Charter establishes the legal basis for the imposition of coercive measures within the United Nations.

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‍Why did the European Union start putting together the lists?

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La European Union began to collect information to create the terrorist list and prevent money laundering following the September 11, 2001 attacks in the United States.

In turn, in 2005, it established a legal framework for the prevention of the use of the financial system for money laundering and terrorist financing. This law, known as the EU Money Laundering Directive (AMLD), has been updated several times since then.

The terrorist list and the prevention of money laundering are the responsibility of the EU's Financial Sanctions Unit (FSU). The FSU stands for “Financial Sanctions Unit” (in English, Financial Sanctions Unit) is a unit of the European Commission that is responsible for managing and enforcing financial sanctions imposed by the EU against specific countries, entities and individuals around the world, with the objective of preventing the financing of terrorism and money laundering and of applying financial sanctions on behalf of the European Union.

The European Anti-Fraud Office is known by the acronym OLAF from its French name, Office de Lutte Anti-Fraud (European Anti-Fraud Office). It is an independent and inter-institutional administrative control body, created in 1999, that investigates fraud or serious irregularities with negative consequences on the EU budget, committed by officials or agents of EU institutions, bodies and bodies or private operators. Its mission is to protect the financial interests of the Union, investigating fraud and other illegal activities, as well as to detect and investigate offences committed by agents in the service of institutions that could lead to administrative and criminal proceedings against them.

OLAF can open investigations ex officio or as a result of complaints from third parties, after which it submits an opinion in which it makes recommendations aimed at protecting the financial interests of the EU.

The EU terrorist list is drawn up with the help of EU member states and is regularly updated. The list includes individuals and organizations that are considered to be involved in terrorist activities or to support such activities. Once a person or organization is included in the list, financial sanctions apply, such as freezing assets and prohibiting doing business with them.

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How is the case with the United Kingdom list?

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The United Kingdom also has a list of financial sanctions that is used to prevent the financing of terrorism and money laundering. The UK Financial Sanctions Office (OFS) is responsible for the enforcement of financial sanctions in the country.

The OFS was established in 2017 as part of a comprehensive strategy to prevent the financing of terrorism and money laundering in the United Kingdom. The office works closely with other government bodies and regulatory authorities to effectively enforce financial sanctions.

The UK sanctions list includes individuals, organizations and countries that are considered to pose a threat to the security and stability of the United Kingdom. Sanctions may include freezing assets and prohibiting doing business with them.

The OFS works closely with other government agencies, such as the Ministry of Foreign Affairs and the Security Intelligence Service (MI5), to identify and monitor individuals and organizations that should be included in the sanctions list.

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When was the Financial Sanctions Office created in United Kingdom?

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The Financial Sanctions Office (OFS) of the United Kingdom was established in 2017 as part of the International Sanctions Act, which, as mentioned, established a legal framework for the application of financial and economic sanctions.

Before the creation of the OFS, the application of financial sanctions was the responsibility of the United Kingdom Treasury. However, the increasing complexity of financial sanctions, the need for coordination with other countries and the importance of protecting the financial sector from illegal activity led to the creation of an office dedicated to the application of financial sanctions.

The OFS is an agency of the United Kingdom government and is part of the Department of the Treasury. The office is tasked with administering and enforcing financial and economic sanctions in the United Kingdom, including drawing up sanctions lists and managing the application of sanctions, ensuring that companies comply with their legal obligations regarding the prevention of money laundering and the financing of terrorism.

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How to avoid such penalties and fines?

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Financial institutions must control their customer onboarding as well as take the necessary measures to ensure the correct diagnosis in the implementation of their monitoring, in the detection of suspicious transactions and in carrying out due diligence before and during the implementation of financial transactions.

It is an important tool against the fight against terrorism and the prevention of money laundering and is designed to mitigate the international fight.