Appendix 2
S.I. 2011/1129 and S.I. 2011/1244: memorandum
from HM Treasury
Iran (Asset-Freezing) Regulations 2011 (S.I. 2011/1129)
and Syria (Asset-Freezing) Regulations 2011 (S.I. 2011/1244)
1. By letter dated 15 June 2011, the
Committee sought a memorandum on the following points:
In the light of comments on S.I. 2010/2937 and S.I.
2010/2956 in the Committee's 16th Report of Session
2010-11.
(a) why do the Explanatory Memoranda not precisely
identify the mechanisms in place for enforcing regulation 8(3)
of these Regulations, given that that Report indicated that the
explanation of the identical provisions of the earlier Regulations
failed to do so, and
(b) what are those mechanisms?
2. In its 16th Report,
the Committee reported regulation 8(3) of S.I. 2010/2937 and S.I.
2010/2956 as requiring elucidation largely but not completely
provided in the Treasury's memoranda to the Committee of 25 January
and 8 February 2011. The Treasury apologises for not providing
the explanation sought in relation to the Iran (Asset-Freezing)
Regulations 2011 and the Syria (Asset-Freezing) Regulations 2011.
3. The Treasury consider that the
Financial Service Authority's supervision of financial institutions
in the context of its objective of reducing financial crime, in
particular of those institutions' responsibility to put in place
appropriate systems and controls to ensure sanctions compliance,
will cover compliance with the regulation 8(3) reporting requirement.
In terms of precise mechanisms, the Financial Services Authority
has a wide range of powers under the Financial Services and Markets
Act 2000 to enforce compliance by financial institutions with
the regulatory obligations imposed on them, including powers of
public censure, publication of statements of misconduct and
imposition of financial penalties, suspension or limitation of
permission to carry on regulated activities and variation or cancellation
of such permission.
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