Guidance

OFSI Personal Staff Payments Licensing Guidance

Updated 12 June 2024

This guidance is produced by the Office of Financial Sanctions Implementation (OFSI), part of HM Treasury, the authority for the implementation of financial sanctions in the UK. 

This guidance sets out OFSI’s policy on licensing personal staff payments. Applicants should use this guidance to understand the circumstances under which OFSI may, or may not, license payments for the personal staff of designated persons, specifically individuals.

This should be considered supplementary to, and not a replacement for, OFSI’s general guidance.

This guidance does not represent legal advice.

If you are unsure about your obligations in a given case, you should consider seeking independent legal advice.

1. Personal staff

OFSI considers personal staff to include those who provide domestic or non-professional services to a designated person and are generally employed directly by the designated individual themselves, are employed by a company owned or controlled by a designated person, or provided by a third party. This category of personal staff includes, for example:

• chefs
• cleaners
• drivers
• house managers
• personal assistants
• laundry workers
• gardeners

This list is not exhaustive but is indicative of the types of employees considered as personal staff under this policy. Examples of persons employed by designated persons that would not be considered personal staff include, for example:

• lawyers
• accountants

The distinction is not strict, and applicants should use their own judgement when considering whether an employee of a designated person should be considered personal staff.

However, if you or your client are unsure, or an employee does not clearly lie on one side of the distinction, it is best to consider how the policy outlined here may apply and to address this in your application.

2. Companies of designated persons

It is also important to note that, although personal staff are generally employed directly by the designated individual themselves, this is not always the case. For example, many designated high-net-worth-individuals may have property management companies to manage their personal property, including their primary residence. Such companies do not usually provide any services to the wider public and exist solely for the purpose of managing the designated individuals’ personal property.

OFSI would consider personal staff employed by such companies to be personal staff of the designated individual. More generally, OFSI would consider any employees of companies running designated individuals’ activities or properties on their behalf to fall under this policy, if they are providing domestic or non-professional services.

3. OFSI’s policy

This section sets out OFSI’s policy in respect of personal staff payments. Applicants should consider this policy carefully before applying for a licence to permit personal staff payments. However, the following only represents OFSI’s general position, and each licence application will still be considered on a case-by-case basis.

OFSI will generally not license payments to personal staff of designated individuals.

However, OFSI will consider exceptions to this position if there are specific extenuating circumstances. Exceptions may be made under the following licensing purposes:

• Basic needs
• Routine holding and maintenance
• Prior obligations

3.1 Basic needs

Many of the requests for personal staff payments are made under the basic needs licensing purpose. As stated in OFSI’s General Guidance (sec.6.5), “expenditure to meet basic needs of an individual should be expenses which are necessary to ensure that designated persons or financially dependent family members are not imperilled.” Generally, OFSI does not consider that personal staff payments meet this threshold.

Personal staff usually perform services that would be considered ‘luxuries,’ rather than services genuinely necessary to provide for a designated individual’s basic needs. OFSI considers that in most cases, the services provided by personal staff (such as those stated above) could be performed by the designated individual themselves.

This is consistent with our approach to the basic needs licensing purpose which is outlined in our General Guidance (sec.6.5), where it is emphasised that “basic needs licences do not necessarily enable a designated person to continue the lifestyle or business activities they had before they were designated.” See also OFSI’s Designated Individuals Licensing Principles (in particular, Principles 5, 6(c), 10(a)-(b), 13 and 14).

In most cases, OFSI consider that having personal staff would enable a designated individual to continue to enjoy a pre-designation lifestyle not available to the average person. As such, licensing such payments undermines the purpose of imposing financial sanctions, which include holding individuals to account and incentivising them to change their behaviour.

However, OFSI will consider licensing personal staff payments under the basic needs licensing purpose if a clear and direct causal link between the specific needs to be catered for and the specific employment of that individual can be established.

Moreover, in line with OFSI’s General Guidance, the needs catered for must go beyond general wellbeing and must be a service that ensures that a designated individual or their dependents are not imperilled.

For example, OFSI may license carers if the applicant can evidence the fact that a lack of continued access to these services would be significantly detrimental to a DP’s health (though it is worth noting that in this specific example applicants may also have to demonstrate that these services could not be provided by the state).

Furthermore, designated individuals may have legitimate fears of risks to their life/health and these increased security needs may need to be provided for to ensure that they and their dependents are not imperilled. OFSI will consider licensing payments for personal security staff in such cases, though the onus is on the applicant to establish that this can be considered a basic need in their specific case.

3.2 Routine holding and maintenance 

As outlined in OFSI’s General Guidance (sec.6.5), the routine holding and maintenance licensing purpose allows OFSI to issue licences for payments that “result in the routine holding or maintenance of frozen funds or economic resources”, provided that the fees or service charges incurred are “reasonable”.

More information on OFSI’s general approach to reasonableness can be found in our Reasonableness in Licensing Blog. See also Principles 7-10 of the Designated Individuals Licensing Principles.

In general, OFSI considers that payments for full-time maintenance staff do not meet the standard of reasonableness and are therefore not licensable under the routine holding and maintenance licensing purpose.

There may be exceptional cases where full-time maintenance staff are necessary to maintain a designated individuals’ property.

However, OFSI considers that it is open to the designated individual to perform any maintenance works themselves. Where a specific need arises that requires services that the designated individual could not reasonably be expected to perform themselves, a specific licence for a one-off payment can be sought. Any such specific maintenance needs will be subject to OFSI’s usual policy on routine holding and maintenance.

Applicants will need to demonstrate why any proposed works are necessary to maintain the fundamental integrity of the frozen asset, and they will need to supply evidence that the fees for such works are reasonable. As stated in our General Guidance (sec.6.5), “re-design, refurbishment or redevelopment in order to improve the value of a frozen economic resource is generally not covered.”

3.4 Prior obligations 

In most cases, designated individuals’ personal staff were employed prior to that individuals’ designation. This means that there is usually a prior contractual obligation for the designated individual to pay personal staff wages or salaries. Applicants may therefore argue that ongoing payments to personal staff should be permitted under the prior obligations licensing purpose on the grounds that ongoing employment was agreed before the individual was designated. 

However, OFSI’s view is that the prior obligations licensing purpose should not be used to permit continuous service of designated individuals’ personal staff. This licensing purpose is not intended to allow designated individuals to continue to enjoy the business activities and lifestyle that they enjoyed pre-designation, and must be balanced against the statutory purpose of the sanctions regime.

To continue to license ongoing payments to personal staff on the basis that employment agreements were in place prior to designation would undermine the objectives of UK sanctions regimes. Allowing designated individuals to continue to employ personal staff to maintain lifestyles far more privileged than that of the general public would undermine these aims by diluting the impact of financial sanctions. As such, OFSI may employ its residual discretion to refuse requests for personal staff payments under the prior obligations licensing purpose in order to preserve the integrity of UK sanctions regimes, as per Principles 2 and 13.

OFSI will generally only license personal staff payments under the prior obligations licensing purpose to allow designated individuals to pay for services already provided, or to allow them to ‘wind down’ their existing arrangements, for example, by issuing redundancy payments.

In cases where work has continued post-designation, OFSI may consider licensing payments up to the point of decision, or up to the point of redundancy (whichever is later). However, applicants should be aware that OFSI do not license activity retrospectively, and it is your responsibility to comply with financial sanctions.

OFSI recognise that refusing to license personal staff payments may have a negative impact on those staff. OFSI generally expect designated individuals to terminate contracts with UK employees at the point of their designation and OFSI would discourage staff from continuing to provide services to designated individuals post-designation.

However, individuals may not be able to immediately exit such arrangements or find alternative employment immediately. As such, OFSI will consider the impact on the wellbeing of employees in its licensing decisions and will license activity that is necessary to ensure that the wellbeing of personal staff is not unnecessarily negatively impacted, as per Principle 6.

4. Further support

For further support with UK financial sanctions, you can:

• Consult OFSI’s general, geographic and sectoral guidance
• Subscribe to E-Alerts from OFSI
• Email OFSI