Sanctions Tracker: Round-up Of UK Sanctions Enforcement And Guidance

In the latest sanctions tracker we report on recent enforcement, updates to guidance, and an important development regarding the UK sanctions list.

OFSI imposes monetary penalty for breach of financial sanctions

The Office of Financial Sanctions Implementation ("OFSI") has imposed a monetary penalty of £160,000 on a bank for breach of the UK's Russia-related asset freeze. The bank processed 24 payments to/from a personal current account held by a designated individual, thereby dealing with funds in breach of the asset freeze and making funds available to the designated person.

The account was opened using a passport – issued by the UK - containing a spelling variation of the designated person's name, which did not match the name recorded on the UK Sanctions List. As a result, an automated sanctions alert was not triggered at account opening, or during the relevant period. The designated person was subsequently identified in a politically exposed person ("PEP") review, although their sanctions status was not escalated due to human error. The designation was subsequently identified after an internal investigation regarding a related account. Following identification of the issue, the bank made a voluntary disclosure to OFSI and benefitted from a 50% discount from the penalty.

In its commentary on the penalty, OFSI notes its view that, although there is no explicit regulatory requirement in relation to commercial sanctions screening lists, OFSI does consider it reasonable to expect that firms with greater sanctions exposure sufficiently enhance their lists used in sanctions screening, either by using a commercial package or undertaking their own enhancement. In this case, the bank's failure to do so was regarded as an aggravating factor. OFSI also notes that the risk was exacerbated by the absence of a sanctions escalation process from the PEP review.

Companies, particularly those faced with higher sanctions risks, may therefore wish to consider their sanctions screening processes, and the extent to which they draw on additional information to assist in the assessment of potential or partial sanctions matches and can take into account potential name variations. Companies with other processes that are capable of supporting their sanctions controls (such as PEP reviews in regulated firms) should also consider the extent to which these processes are inter-connected and may therefore provide an additional route for escalating sanctions concerns internally.

Single list for UK sanctions designations

As announced last year, the OFSI Consolidated List has now been closed, and the single source of UK sanctions designations is now the UK Sanctions List published by the Foreign Commonwealth & Development Office. OFSI has made various updates to its guidance documentation to reflect this and new regime-specific pages have been created to cover changes to designations made on the UK Sanctions List (see here for access to the new regime pages).

OFSI updates FAQs

OFSI has updated its FAQs on financial sanctions by adding new FAQs 177-183 which relate to the general licence on arbitration costs issued in March 2025.

The FAQs have also been updated to reflect:

• the lowering of the Russia oil price cap to $44.10 from 31 January 2026;
• an amendment to the Russia general licence permitting humanitarian activity (see FAQs 147-148); and
• an amendment to FAQ 133 in relation to reporting obligations when a relevant firm refuses business to a designated person. This change may be of particular interest to firms in that it provides some further guidance on the circumstances in which OFSI expects a report to be made; in particular if they know or suspect that there have been breaches of sanctions or when information is identified that could be considered of interest to OFSI in relation to aliases. The amended FAQ also includes example scenarios as further guidance on when OFSI does and does not expect reporting. Whilst in some respects difficult to reconcile with the requirements of the sanctions legislation, it is helpful to understand OFSI's expectations.

Cryptoassets linked to sanctions evasion

OFSI has published a blog on the use of cryptoassets to evade sanctions, highlighting its work with the Crypto Cash Fusion Cell – a pilot multiagency initiative with the aim of improving how the UK enforcement and regulatory community understands and respond to criminal abuse of cryptoassets. OFSI states that it is ready to investigate and pursue sanctions offences involving cryptoassets.

Sanctions enforcement changes

At the end of January 2026, OFSI published its response to its 2025 consultation on changes to its enforcement processes. On 9 February, OFSI published an updated version of its Financial Sanctions Enforcement and Monetary Penalties Guidance to reflect the consultation outcome. The changes include the introduction of an 'early account scheme' and a 'settlement scheme' as well as changes to case factors, cooperation discounts, and other matters. The changes are effective immediately and we will be publishing a separate briefing in relation to these.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.