Partially upheld: Other regulated complaint complaint against Brown Shipley & Co Limited

Decision detail

Summary

Ms B complained after Brown Shipley placed restrictions on her investment account in October 2020 under OFAC Iranian Transactions and Sanctions Regulations, determining she qualified as an ordinary resident in Iran. Ms B, a UK private individual, disputed the application of the embargo and was unhappy about delays in being informed, the 18-month delay in applying for an OFAC licence, and ongoing management fees totalling approximately £13,500. The ombudsman found Brown Shipley acted fairly in applying the embargo and not refunding fees due to sanctions compliance concerns, but upheld the complaint regarding the unreasonable delay in applying for the OFAC licence. The ombudsman awarded £500 compensation for the distress and inconvenience caused by this delay and noted Brown Shipley would consider fee refunds once the licence decision was made.

The Ombudsman's reasoning

The ombudsman found that Brown Shipley acted fairly in applying the embargo as they have a legal obligation to comply with OFAC regulations and protect account security. The four-month delay in informing Ms B of the embargo was reasonable given the need for proper legal review and due diligence with compliance and legal partners. However, the 18-month delay in applying for the OFAC licence (from October 2020 to March 2022) was not reasonable, particularly the six-month period between September 2021 and March 2022 before the application was submitted. While no financial loss could be demonstrated, Ms B suffered distress and inconvenience. Brown Shipley acted fairly in not refunding fees as they considered this could constitute a sanctions breach, though they agreed to consider refunds post-licence decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website