United Kingdom — Sanctions & Embargoes

The United Kingdom operates an autonomous sanctions framework under the Sanctions and Anti-Money Laundering Act 2018 (SAMLA), which received Royal Assent on 23 May 2018 and established the UK's independent sanctions regime following Brexit. SAMLA enables UK Ministers to make regulations imposing sanctions for compliance with UN or international obligations, for autonomous UK purposes (including foreign policy, national security, international peace and security, prevention of terrorism, and accountability for gross violations of human rights), or a combination of both (mixed UK/UN regimes).

Section 1 of SAMLA grants "appropriate Ministers" the power to make regulations imposing sanctions where the Minister considers it appropriate to do so for one or more purposes specified in section 1(2). This delegation structure permits the UK to create UN-only regimes (implementing UN Security Council Resolutions), autonomous regimes (implementing UK-specific objectives), and mixed UK/UN regimes (implementing both UN obligations and additional UK purposes). Section 3A of SAMLA, added by amendment, provides for director disqualification sanctions, rendering it unlawful for a designated person to act as a director of a company once implemented via secondary legislation.

OFSI enforcement authority and structure

The Office of Financial Sanctions Implementation (OFSI) is the competent authority responsible for ensuring that UK financial sanctions are properly understood, implemented, and enforced. OFSI is part of HM Treasury and leads civil enforcement of financial sanctions and the Oil Price Cap on Russian oil.

OFSI's remit covers:

• Financial sanctions under SAMLA regulations, including asset freezes, investment bans, financial-services prohibitions, and the ownership-and-control test that extends asset-freeze obligations to entities owned or controlled directly or indirectly by designated persons (for example, Regulation 7(4) of The Russia (Sanctions) (EU Exit) Regulations 2019, S.I. 2019/855).
• The Oil Price Cap on Russian oil and oil products, including prohibitions on the supply, delivery, and related services for Russian-origin crude oil and petroleum products above a specified price ceiling.
• Licensing: OFSI administers general licences and issues specific licences permitting otherwise-prohibited transactions where statutory grounds (for example, basic-needs payments, legal-services fees, or humanitarian assistance) are met.
• Guidance and compliance support: OFSI publishes general financial sanctions guidance, regime-specific statutory guidance (for example, Russia sanctions guidance), and sector-specific threat assessments.

OFSI does not enforce trade sanctions on goods, immigration sanctions (travel bans), or director-disqualification sanctions. Those fall respectively to the Office of Trade Sanctions Implementation (OTSI) / HMRC, the Home Office, and the Insolvency Service.

UK Sanctions List

OFSI maintains the UK Sanctions List, which since 28 January 2026 is the sole authoritative source for all UK sanctions designations; the legacy OFSI Consolidated List of Asset Freeze Targets was closed on that date. Entities and individuals on the UK Sanctions List are subject to asset freezes, and the ownership-and-control test extends asset-freeze obligations to any entity owned or controlled by a designated person even if not explicitly named on the List. The control limb of the ownership-and-control test has been the subject of litigation (for example, NBT v Mints [2023] EWCA Civ 1132) and an OFSI call for evidence launched in February 2026 to address industry concerns about uncertainty in implementing the control test.

Territorial scope

UK financial sanctions apply to any conduct in the United Kingdom and to all UK persons (including UK legal entities and individuals ordinarily resident in the UK) anywhere in the world, meaning extraterritorial jurisdiction attaches to UK nationals and companies operating outside the UK.

Civil enforcement tools

OFSI may impose civil monetary penalties for breaches of financial sanctions. The statutory maximum civil penalty is the higher of £1 million or 50% of the value of the breach for financial sanctions, and the higher of £1 million or 50% of the estimated value of the ship or aircraft used in connection with the breach for transport sanctions. OFSI's enforcement toolkit includes monetary penalties, warning letters (including warning letters with referral to a regulator such as the Financial Conduct Authority or professional bodies), disclosure notices (public naming of a firm that committed a confirmed breach, without a monetary penalty), and referral to criminal enforcement partners (the National Crime Agency, HMRC, or regional police forces) for serious or deliberate breaches.

The UK Government published a cross-government strategic approach to sanctions enforcement in March 2026, which frames enforcement as a coordinated, risk-based framework across OFSI, NCA, OTSI, HMRC, and regulators such as OFCOM and the Financial Conduct Authority, and confirms that the UK will use its toughest measures in response to the most serious and deliberate breaches while supporting compliance and proportionate consequences for technical or lower-severity violations.

Reporting obligations

SAMLA regulations impose reporting obligations on "relevant firms"—persons with permission under Part 4A of the Financial Services and Markets Act 2000 to carry on regulated activities. Relevant firms must inform OFSI "as soon as practicable" if they know or reasonably suspect that a person is a designated person or has breached a prohibition, where that information is received in the course of carrying on business. Additional regime-specific reporting obligations apply; for example, the Russia (Sanctions) (EU Exit) Regulations 2019 require relevant firms to report annually (by 30 November, as amended in 2024) on the nature and amount of funds or economic resources held for prohibited persons (including the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation) as of 30 September each year.

Relevant institutions must also inform OFSI without delay when they credit a frozen account or receive funds transferred for crediting such an account. Designated persons themselves are subject to disclosure obligations under section 21 of SAMLA: UK persons who are designated must disclose to OFSI the nature, value, and location of any funds or economic resources they own, hold, or control, regardless of where in the world those assets are located. The initial report must be provided within 10 weeks, and any later change in financial circumstances must be reported as soon as practicable. Designated persons must report any funds or economic resources exceeding £10,000 in value.

Relationship to criminal enforcement

OFSI's civil enforcement remit is complemented by criminal enforcement led by the National Crime Agency (NCA), which investigates and prosecutes criminal breaches of financial and transport sanctions. The NCA's Serious Organised Crime and State Threat Unit (the Combatting Kleptocracy Cell) targets corrupt elites, proxies, and enablers linked to serious organised crime and hostile states. HMRC has criminal enforcement responsibility for all trade sanctions measures and enforces trade sanctions on goods crossing the UK border. The Serious Fraud Office may investigate and prosecute sanctions-related fraud cases.

The Foreign, Commonwealth and Development Office (FCDO) is responsible for the UK's overall foreign policy, including high-level policy objectives, sanctions regimes design, and strategy, and leads designations (decisions to apply sanctions measures to specific individuals or entities) and ship specifications. OFSI leads on designations under the UK's domestic counter-terrorism sanctions regimes.

Source: Sanctions and Anti-Money Laundering Act 2018 Source: Post-Legislative Scrutiny Memorandum: Sanctions and Anti-Money Laundering Act 2018 — GOV.UK Source: Office of Financial Sanctions Implementation — GOV.UK Source: UK Sanctions — GOV.UK collection Source: UK Government's strategic approach to sanctions enforcement — GOV.UK (March 2026) Source: UK financial sanctions general guidance — GOV.UK Source: The UK Sanctions List — GOV.UK

UK financial sanctions impose three core asset-freeze prohibitions on any person who knows, or has reasonable cause to suspect, that they are dealing with a designated person's assets. These prohibitions apply to all UK persons worldwide and to any person acting in the United Kingdom, regardless of nationality. The prohibitions appear in every UK sanctions regime made under the Sanctions and Anti-Money Laundering Act 2018 (SAMLA); the Russia (Sanctions) (EU Exit) Regulations 2019, S.I. 2019/855, serve as the template and most heavily litigated example.

Prohibition 1: Dealing with frozen funds or economic resources (regulation 11)

A person must not deal with funds or economic resources owned, held or controlled by a designated person if the person knows, or has reasonable cause to suspect, that they are dealing with such funds or economic resources. "Funds" include cash, deposits, securities, debt instruments, interest, dividends, credit, set-off rights, guarantees, and other financial commitments (SAMLA 2018, section 60(2)). "Economic resources" means assets of every kind—tangible or intangible, movable or immovable—which are not funds but can be used to obtain funds, goods, or services (SAMLA 2018, section 60(3)). Economic resources include real property, vehicles, machinery, intellectual property, and inventory.

For the purposes of regulation 11, a person "deals with" funds if they use, alter, move, transfer, or allow access to the funds; deal with the funds in any other way that results in any change in volume, amount, location, ownership, possession, character, or destination; or make any other change (including portfolio management) that would enable use of the funds. A person "deals with" economic resources if they exchange or use the resources in exchange for funds, goods, or services (Russia Regulations 2019, regulation 11(4)–(5)).

The prohibition extends to entities owned or controlled by a designated person even if the entity is not explicitly named on the UK Sanctions List. Regulation 7 of the Russia Regulations (and corresponding provisions in other regimes) defines ownership and control: an entity is "owned or controlled" if the designated person holds more than 50% of shares or voting rights, or has the right to appoint or remove a majority of the board, or otherwise has the right to direct the entity's affairs. OFSI's February 2026 call for evidence acknowledged industry concern over the application of the control limb, particularly after the Court of Appeal's decision in NBT v Mints [2023] EWCA Civ 1132.

Prohibition 2: Making funds available to a designated person (regulation 12)

A person ("P") must not make funds available directly or indirectly to a designated person if P knows, or has reasonable cause to suspect, that P is making the funds so available. The "directly or indirectly" formulation captures transfers routed through intermediaries or nominees. A defence exists: it is a defence for a person charged with an offence of contravening this prohibition to show that the person did not know and had no reasonable cause to suspect that the funds were being made available to a designated person.

Prohibition 3: Making funds available for the benefit of a designated person (regulation 13)

A person ("P") must not make funds available to any person for the benefit of a designated person if P knows, or has reasonable cause to suspect, that P is making the funds so available. Funds are made available for the benefit of a designated person only if that person thereby obtains, or is able to obtain, a significant financial benefit. "Financial benefit" includes the discharge (in whole or in part) of a financial obligation for which the designated person is wholly or partly responsible (Russia Regulations 2019, regulation 13(2)).

This prohibition captures payments to third parties that relieve a designated person's obligation—for example, paying a supplier on behalf of a designated person, or paying rent for premises occupied by a designated person.

Prohibitions 4 and 5: Making economic resources available (regulations 14–15)

Parallel prohibitions apply to economic resources. A person must not make economic resources available directly or indirectly to a designated person (regulation 14) or for the benefit of a designated person (regulation 15), if the person knows or has reasonable cause to suspect that the economic resources would or may be exchanged or used in exchange for funds, goods, or services. These prohibitions cover, for example, providing office space, vehicles, or equipment to a designated person or for their benefit.

Mental element: "knows, or has reasonable cause to suspect"

Each prohibition is triggered only if the person knows, or has reasonable cause to suspect the relevant fact (that the asset is owned by a designated person, that funds are being made available to or for the benefit of a designated person, etc.). This is an objective test: a person has reasonable cause to suspect if a reasonable person in the same position and with the same information would suspect. OFSI's enforcement guidance emphasises that firms must conduct adequate due diligence; a failure to check the UK Sanctions List or to investigate red flags may itself give rise to reasonable cause to suspect. The mental element applies at the time of the transaction; retrospective knowledge does not create a breach, but it triggers an obligation to freeze the asset going forward and to report to OFSI.

Territorial scope

The asset-freeze prohibitions apply to any conduct in the United Kingdom by any person, and to any conduct anywhere in the world by UK persons. A "UK person" includes UK nationals, individuals ordinarily resident in the UK, and bodies incorporated or constituted under UK law (Russia Regulations 2019, regulation 3). This extraterritorial reach means that a UK company's overseas subsidiary (if incorporated under foreign law) is not automatically a UK person, but a UK national employed overseas remains subject to UK asset-freeze obligations worldwide.

Exceptions

Narrow automatic exceptions permit, without a licence, crediting a frozen account with interest or other earnings (so long as the interest is immediately frozen), and transferring funds to a frozen account in discharge of obligations that arose before the person was designated (Russia Regulations 2019, regulation 58(3)–(5), as amended by S.I. 2024/1157). A relevant institution (a person with FCA permission to carry on regulated activities) must inform OFSI without delay when it credits a frozen account under these exceptions. All other dealings require an OFSI licence under one of the statutory licensing grounds in Schedule 5 to the Russia Regulations (or the corresponding schedule in other regimes).

Criminal and civil liability

A breach of any of the five core prohibitions is a criminal offence. On summary conviction, the maximum penalty is 12 months' imprisonment or a fine (or both); on indictment, the maximum is 7 years' imprisonment or an unlimited fine (or both). OFSI may also impose civil monetary penalties of up to the higher of £1 million or 50% of the value of the breach, without needing to prove knowledge or reasonable cause to suspect—strict liability applies for civil enforcement, though OFSI's published guidance confirms that it will consider the presence or absence of knowledge and the adequacy of compliance systems when setting the penalty amount.

Source: Sanctions and Anti-Money Laundering Act 2018, section 60 Source: The Russia (Sanctions) (EU Exit) Regulations 2019, S.I. 2019/855, regulations 11–15 Source: UK financial sanctions general guidance — GOV.UK Source: The Sanctions (EU Exit) (Miscellaneous Amendments) (No. 2) Regulations 2024, S.I. 2024/1157

UK financial sanctions regulations impose strict prohibitions by default, but OFSI (the Office of Financial Sanctions Implementation) may issue licences permitting otherwise-prohibited activity where one or more statutory licensing grounds is met. A licence is written permission to carry out an act that would otherwise breach financial sanctions; it does not compel any party to take action, and third parties (such as banks) may decline to execute a licensed transaction on commercial or risk grounds.

General licences vs. specific licences

UK sanctions regulations provide for two categories of licences. General licences are published by OFSI and permit multiple parties to undertake specified activities without the need for individual application; applicants should check whether a relevant general licence already covers the intended activity before applying for a specific licence. Only specific licences are issued on a case-by-case basis in response to an application via OFSI’s prescribed form. Applications are assessed by OFSI’s licensing team according to the statutory licensing grounds in the relevant sanctions regime.

Statutory licensing grounds (as of June 2026, with 2026 amendment)

Each UK sanctions regime under the Sanctions and Anti-Money Laundering Act 2018 (SAMLA) includes a schedule of licensing grounds, with the Russia (Sanctions) (EU Exit) Regulations 2019, Schedule 5, serving as the main template. Notable grounds (see Schedule 5, as amended) include:

• Basic needs;
• Legal services;
• Maintenance of frozen funds or assets;
• Extraordinary expenses;
• Prior obligations;
• Diplomatic missions/international organisations;
• Humanitarian assistance;
• Insolvency/restructuring;
• Divestment from Russia.

Amendment in 2026: The Sanctions (EU Exit) (Miscellaneous Amendments) Regulations 2026 (S.I. 2026/443) made a technical but important change: it broadened the “prior obligations” licensing ground so that OFSI now has clearer authority to license transactions necessary for the discharge of obligations incurred prior to designation, including routine and non-routine payments. This responds to industry concerns and aligns the UK approach with developments in EU law. OFSI guidance is expected to be updated to reflect this clarification.

Licensing grounds may differ by regime (e.g., counter-terrorism), but practitioners must always identify and evidence the applicable statutory ground for any application. The legislation’s Schedule 5 should be checked for current language and any regime-specific expansions or limitations.

Application mechanics and OFSI prioritisation

Applicants for a specific licence submit an online form requiring:

• Identification of the statutory licensing ground and justification;
• Explanation of relevant sanctions and designated persons;
• Comprehensive transaction/party details;
• Intended purpose and evidence supporting reasonableness/necessity.

OFSI uses a prioritisation framework, treating cases as high, medium, or low depending on humanitarian urgency, economic impact, and other criteria described in published guidance.

Outcome and conditions

A granted licence will specify the exact permissions and conditions binding the applicant. Breach of a licence condition is a criminal offence. Licences for financial sanctions are distinct from trade and export control licences, and applicants must secure authorisations from all relevant authorities where multiple regimes apply.

Primary sources: Source: The Russia (Sanctions) (EU Exit) Regulations 2019, Schedule 5 — Licences Source: The Sanctions (EU Exit) (Miscellaneous Amendments) Regulations 2026, Reg. 3(3) Source: How to apply for a financial sanctions licence — GOV.UK Source: OFSI Designated Individuals Licensing Principles — GOV.UK Source: An update on OFSI's licensing process and policies — OFSI Blog, 27 February 2024

OFSI may impose civil monetary penalties for breaches of UK financial sanctions under section 146 of the Policing and Crime Act 2017, as amended by the Economic Crime (Transparency and Enforcement) Act 2022. The civil penalty regime operates in parallel to criminal enforcement; a person may face a civil penalty, criminal prosecution, or both (though double jeopardy protections prevent conviction and penalty for the same conduct). Civil penalties provide a flexible enforcement tool for cases where criminal prosecution is disproportionate but deterrence and accountability are required.

## Strict liability for civil penalties (effective 15 June 2022)

Strict liability applies to OFSI's civil enforcement powers. Section 54 of the Economic Crime (Transparency and Enforcement) Act 2022, which came into force on 15 June 2022, amended section 146(1) of the Policing and Crime Act 2017 to remove the requirement that OFSI prove the person "knew or had reasonable cause to suspect" they were breaching sanctions. Section 146(1A) provides that in determining whether a person has breached a prohibition or failed to comply with an obligation imposed by financial sanctions legislation, "any requirement imposed by or under that legislation for the person to have known, suspected or believed any matter is to be ignored" for the purposes of civil enforcement.

OFSI need only satisfy itself, on the balance of probabilities, that a breach occurred. Knowledge, intention, and reasonable cause to suspect remain relevant to criminal liability under the sanctions regulations themselves, and OFSI considers them as case factors when deciding whether to impose a penalty and in what amount — but they are not elements OFSI must prove to establish that a breach occurred for civil enforcement purposes. This means a firm that processes a payment for a designated person without knowledge or reasonable grounds to suspect may still face a civil penalty, though OFSI's published guidance indicates that lack of knowledge is a mitigating factor that will reduce the penalty amount and may, in cases of genuine inadvertence with strong compliance systems, result in a warning letter or no enforcement action rather than a monetary penalty.

## Statutory maximum penalties (current law)

The permitted maximum civil penalty is set by section 146(3)–(4) of the Policing and Crime Act 2017. Where the breach relates to particular funds or economic resources and it is possible to estimate the value, the permitted maximum is the greater of:

• £1 million, or
• 50% of the estimated value of the funds or economic resources.

In any other case (for example, breaches of information obligations, licensing requirements, or prohibitions on making funds available where the value cannot be estimated), the permitted maximum is £1 million (section 146(4)).

On 29 January 2026, HM Treasury published a consultation response confirming its intention to legislate to double the statutory maximum to the greater of £2 million or the total value (100%) of the breach. This increase requires primary or secondary legislation and will be brought forward when parliamentary time allows. The increase had not been enacted as of 1 June 2026; the £1 million / 50% cap remains in force until amended by statute.

## Baseline penalty and case-assessment factors

OFSI applies a structured methodology to calculate the penalty amount, set out in its Enforcement and Monetary Penalties Guidance (most recently updated February 2026). OFSI first establishes a baseline penalty by assessing the breach against case factors including:

1. Revenue, profit, and size of the organisation (or income and assets for individuals): larger organisations face higher baselines.
2. Nature and severity of the breach: whether the breach was a one-off payment or a systemic failure; the duration; whether it involved circumvention or concealment.
3. Knowledge, intention, and reasonable cause to suspect: deliberate breaches attract higher penalties; inadvertent breaches with reasonable compliance systems attract lower penalties.
4. Individual characteristics (for natural persons): personal financial circumstances, though OFSI will not reduce penalties below a level that maintains deterrence.
5. Sanctions compliance measures: quality and adequacy of the person's compliance systems, screening procedures, training, and governance.
6. Cooperation: the extent and timeliness of cooperation with OFSI's investigation.
7. Whether the breach has been voluntarily disclosed: early and complete voluntary disclosure is rewarded with a discount (see below).

OFSI applies these factors to arrive at a baseline penalty figure, which may be adjusted upward for aggravating factors (for example, previous breaches, obstruction of the investigation, senior management involvement) or downward for mitigating factors (for example, self-reporting, remedial action, genuine mistake with otherwise strong controls).

## Penalty discounts for voluntary disclosure, settlement, and early account (policy effective February 2026)

OFSI's Enforcement and Monetary Penalties Guidance, updated and published in February 2026, introduced three stackable discounts that may reduce the baseline penalty. These discounts are policy commitments set out in OFSI guidance, not statutory requirements; they reflect how OFSI exercises its discretion under section 146(2) of the Policing and Crime Act 2017 when determining the amount of a penalty.

Voluntary disclosure and cooperation discount (up to 30%)

A person who voluntarily discloses a breach to OFSI before OFSI becomes aware of it from another source, and who provides complete and timely cooperation throughout the investigation, may receive a discount of up to 30% on the baseline penalty. OFSI's guidance defines complete voluntary disclosure as disclosure that is made proactively (not in response to an OFSI enquiry), includes all relevant facts and supporting evidence, is made as soon as practicable after the person becomes aware of the breach, and is accompanied by a clear explanation of what occurred, why, and what steps have been taken to prevent recurrence.

The 30% figure is a cap; the actual discount depends on the completeness and timeliness of the disclosure and the quality of cooperation. Disclosure after OFSI has contacted the person, or incomplete disclosure that requires OFSI to expend significant investigative resource, will attract a lower or no discount.

Settlement Scheme discount (20%)

OFSI introduced a Settlement Scheme in its February 2026 guidance. Where OFSI has completed its investigation and is satisfied that a breach occurred and that a monetary penalty is appropriate, it may offer the subject the opportunity to settle the case by agreeing to the penalty without proceeding through the full Notice of Intent and representations process. A person who accepts a settlement offer within the time specified (typically 14 days) receives a 20% discount on the penalty that would otherwise have been imposed. Settlement is voluntary; a person may decline and proceed through the standard procedural-rights process under section 147 of the Policing and Crime Act 2017.

Early Account Scheme discount (up to 20%)

The Early Account Scheme (EAS), also introduced in OFSI's February 2026 guidance, permits subjects of an OFSI investigation to provide a comprehensive written account of the breach at an early stage of the investigation, significantly reducing the investigative burden on OFSI. Where OFSI invites participation in the EAS and the subject provides a complete, accurate, and timely account (including full supporting documentation and a clear narrative of events), OFSI may apply an EAS discount of up to 20% on the baseline penalty. The EAS is available only in cases where OFSI considers it appropriate; OFSI will not offer EAS participation in cases involving deliberate circumvention, concealment, or complex multi-party arrangements where OFSI requires independent investigation.

Stacking of discounts

The three discounts are cumulative. A person who voluntarily discloses (30%), participates in the EAS (20%), and accepts settlement (20%) may receive a combined discount of up to 70% on the baseline penalty, though OFSI retains discretion to apply lower percentages within each band based on the quality and timeliness of the disclosure, cooperation, account, and settlement acceptance.

## Penalties on individual officers

Section 148 of the Policing and Crime Act 2017 permits OFSI to impose a separate monetary penalty on an officer of a body (director, manager, secretary, or similar officer of a body corporate; partner in a partnership; or person concerned in management of an unincorporated body) if OFSI is satisfied, on the balance of probabilities, that the breach by the body took place with the consent or connivance of the officer, or was attributable to any neglect on the part of the officer. The officer's penalty is subject to the same maximum and procedural rights as the body's penalty. OFSI's published enforcement decisions to date have imposed officer penalties in cases where the officer had direct oversight of the sanctioned transaction and failed to act on red flags or compliance alerts.

## Financial hardship and public interest

OFSI's February 2026 guidance includes a policy on financial hardship. Where a person claims that payment of the penalty would cause exceptional financial hardship, OFSI may reduce the penalty if satisfied that hardship is demonstrated and that a reduction would not be contrary to the public interest. The burden of proof lies with the subject; OFSI requires detailed financial evidence (audited accounts, cash-flow forecasts, evidence of inability to borrow or raise capital). OFSI will not reduce penalties below a level that maintains the deterrent effect of the regime or where the breach was deliberate, involved senior management, or demonstrated systemic compliance failures. OFSI has published guidance confirming that it will consider whether the person has taken steps to dispose of assets or restructure to avoid the penalty, and may refuse a reduction if it considers the financial position was engineered.

## Disclosure notices (public naming without penalty)

Section 56 of the Economic Crime (Transparency and Enforcement) Act 2022 amended section 149 of the Policing and Crime Act 2017 to permit OFSI to publish Disclosure notices — public statements that OFSI is satisfied, on the balance of probabilities, that a person breached financial sanctions, even in cases where OFSI decides not to impose a monetary penalty. OFSI may issue a Disclosure notice where a breach occurred but mitigating factors (for example, voluntary disclosure, immediate remediation, minor value, strong compliance culture) make a monetary penalty disproportionate, yet public accountability and deterrence are served by naming the breach. The Disclosure notice includes a summary of the breach and OFSI's findings but does not include a monetary penalty. The person has procedural rights equivalent to those for a penalty (Notice of Intent, right to make representations) before the Disclosure notice is published.

## Procedural rights and appeals

A person subject to a proposed penalty has rights under section 147 of the Policing and Crime Act 2017. OFSI must issue a Notice of Intent setting out the proposed penalty and the reasons; the person has 28 days to make written representations. OFSI must consider the representations before making a final decision. If OFSI decides to impose the penalty, it issues a Final Notice specifying the amount, the reasons, and the payment deadline (typically 28 days). The person may appeal to the Upper Tribunal (Tax and Chancery Chamber) within 28 days of the Final Notice. The Tribunal may quash the penalty or substitute a different amount. The penalty is not payable while an appeal is pending. Payment is recovered as a civil debt if not paid voluntarily.

Source: Policing and Crime Act 2017, section 146 Source: Policing and Crime Act 2017, sections 147–148 Source: Economic Crime (Transparency and Enforcement) Act 2022, sections 54–56 Source: Financial sanctions enforcement and monetary penalties guidance — GOV.UK Source: New and updated enforcement framework – OFSI Blog, 29 January 2026

UK trade sanctions enforcement is divided between HM Revenue & Customs (HMRC) and the Office of Trade Sanctions Implementation (OTSI), each with distinct but sometimes overlapping roles as of June 2026.

HMRC: Border and Criminal Enforcement HMRC remains responsible for enforcing all trade sanctions on goods and technology that cross the UK border. This includes the prohibitions found in Part 5 (Trade) of the Russia (Sanctions) (EU Exit) Regulations 2019 as well as related regimes for import/export, transit, and procurement. HMRC's remit covers enforcement at the border using its powers under the Customs and Excise Management Act 1979 (CEMA), including examination, detention, and seizure of goods, and prosecution or administrative settlement of breaches. HMRC also holds overall criminal enforcement authority for trade sanctions, regardless of whether the original investigation was civil or administrative, and retains lead criminal enforcement for strategic export controls (e.g., Export Control Order 2008). Any case that merits criminal investigation or prosecution may be referred to HMRC, including those flagged initially by OTSI.

OTSI: Civil Enforcement and Licensing Expansion (April 2026) OTSI, launched 10 October 2024, is the UK's dedicated civil enforcement body for trade sanctions under the Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024 (S.I. 2024/948, “TASSCER”). OTSI is part of the Department for Business and Trade and started with powers to enforce breaches of standalone services bans (e.g., professional, management, accounting, and business services to Russia or sanctioned destinations), as well as certain non-border movements of controlled goods and ancillary services involving UK persons.

Material change—April 2026: Expanded Licensing Remit From 27 April 2026, OTSI’s statutory licensing responsibilities expanded to include licensing for most sanctioned goods exports not subject to the special controls of the Export Control Joint Unit (ECJU). OTSI now manages applications for both services and most goods-related export sanctions licensing (excluding strategic military/dual-use goods, which remain the ECJU’s responsibility). OTSI's remit covers:

• Provision/procurement of sanctioned standalone services (business services, certain legal, PR, architecture, etc.)
• Export, movement, making available, or acquisition of sanctioned goods/technology outside the UK, where a UK person is involved
• Ancillary services related to those goods and technology
• Licensing for most sanctioned goods exports not covered by the ECJU

Applications for strategic export controls and SPIRE-regime goods (military, dual-use) still go to ECJU; OTSI handles most others via its expanded online service.

Enforcement Powers and Coordination OTSI may impose civil monetary penalties, warning letters, and disclosure notices, operating a parallel process to OFSI but for trade sanctions. OTSI's civil penalties use a strict liability model, with statutory maximum penalties of the greater of £1 million or 50% of the value of the goods/services involved (regulation 9 of TASSCER). OTSI does not have criminal prosecution powers but refers appropriate cases to HMRC for criminal investigation.

Summary of current division as of June 2026:

• HMRC: Border goods enforcement (import/export of sanctioned goods and technology); criminal prosecution for all trade sanctions; strategic export control enforcement.
• OTSI: Civil enforcement (monetary penalties, warnings) for trade sanctions; licensing for most sanctioned goods/services exports (from April 2026); standalone services and non-border movements involving UK persons; publishes guidelines, blog updates, and case studies.

All businesses and professionals subject to UK trade sanctions should check the latest guidance and licensing instructions on GOV.UK or the OTSI blog, particularly due to the major change in OTSI’s remit from April 2026.

Source: The Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024, S.I. 2024/948 Source: One Year of the Office of Trade Sanctions Implementation (OTSI) — GOV.UK Source: Expanding OTSI’s licensing remit — OTSI Blog, 9 April 2026 Source: Russia sanctions: statutory guidance — GOV.UK

The UK Sanctions List is the official, authoritative record of all individuals, entities, and ships designated under UK sanctions law. Managed jointly by the Foreign, Commonwealth and Development Office (FCDO) and the Office of Financial Sanctions Implementation (OFSI), the List serves as the central compliance reference for UK financial, trade, and transport sanctions regimes following Brexit.

Designation and listing mechanics Under the Sanctions and Anti-Money Laundering Act 2018 (SAMLA 2018), UK Ministers may designate individuals, entities, or vessels for a range of reasons: to meet UN obligations, advance UK foreign policy or national security, respond to terrorism, or in line with other statutory purposes set by Parliament (SAMLA 2018, sections 1, 11–13). Once designated under regime-specific regulations (for example, The Russia (Sanctions) (EU Exit) Regulations 2019), a subject’s identifying details are published in the UK Sanctions List. Designation details may include specific measure(s) imposed—such as asset freezes, travel bans, trust services bans, or shipping restrictions.

The List covers live designations only, with each entry specifying name, identifying details (such as date of birth or registration, address, aliases), the legal basis for the designation, regime, and the nature of the restrictions. The List is updated by the FCDO and OFSI as new designations are made, varied, or revoked. The government publishes change logs and offers the List in spreadsheet (CSV, Excel) and PDF formats for bulk screening purposes. The latest version, with update frequency and change notices, is provided on the official GOV.UK list page.

Compliance application and structure Practitioners should use the current UK Sanctions List as their screening baseline for onboarding, periodic KYC, and transaction monitoring. Entities owned or controlled (directly or indirectly) by a listed person may also be captured by asset-freeze obligations, even if those entities do not appear explicitly on the List. OFSI’s general guidance addresses ownership and control tests for asset freezes, which are applied on a fact-specific basis (e.g., a designated person owning more than 50% of shares or voting rights). The List itself does not exhaustively name controlled subsidiaries; compliance officers should review OFSI guidance for scenario-specific obligations.

Appeals and review A designated person may request a ministerial review of their status under section 23 of SAMLA 2018 and can apply to the High Court for further review. The List is updated to reflect the outcome of such challenges or annual reviews as provided for in the regulations.

The UK Sanctions List, as published on GOV.UK, remains the primary authority for designation status. For compliance policies and technical integration, practitioners should consult OFSI’s financial sanctions general guidance, which describes how to use the List for day-to-day due diligence and what information must be sourced from it for ongoing monitoring.

Source: The UK Sanctions List — GOV.UK Source: Sanctions and Anti-Money Laundering Act 2018, sections 11–13, 23 Source: UK financial sanctions general guidance — GOV.UK

As of 28 January 2026, the United Kingdom maintains a single, consolidated list of sanctions designations—the UK Sanctions List (UKSL)—which is the sole authoritative source for all UK sanctions targets. This list replaces the legacy OFSI Consolidated List of Asset Freeze Targets and covers all persons, entities, and ships subject to asset freezes, financial restrictions, trust services bans, travel bans, and shipping sanctions under UK law. Practitioners must use the UKSL as their definitive reference for all screening, onboarding, and periodic KYC processes involving UK financial and trade sanctions.

Transition and legal authority The transition to the single UKSL was implemented by the Foreign, Commonwealth & Development Office (FCDO), with support from OFSI. This follows amendments to the Sanctions and Anti-Money Laundering Act 2018 regime and regime regulations, as confirmed in official guidance published in October 2025 and updated with the transition on 28 January 2026. The UKSL is now the legal baseline for checking designation status.

List format, Unique IDs, and systems impacts Every designation on the UKSL is assigned a unique Sanctions List Reference Number (“Unique ID”), which is now the required identifier for compliance screening. The previous “Group ID” system is no longer authoritative, though GOV.UK provides backward compatibility fields for a limited transition period. The UKSL is published in multiple formats (CSV, XLSX, PDF, XML, JSON) to support automated screening, and each record specifies the legal basis for the designation, regime, asset-freeze status, and effective date. Bulk download options are updated in near real time as new designations are made or revoked.

Implications for compliance and reporting All organisations subject to UK sanctions obligations—including relevant firms, financial institutions, customs brokers, and designated non-financial businesses and professions (DNFBPs)—are required to screen against the UKSL for onboarding, transaction monitoring, and periodic review. OFSI’s general licence and voluntary disclosure reporting must reference the UKSL Unique ID. The old OFSI Consolidated List is deprecated and should not be relied on for any legal or compliance purpose after 28 January 2026. Firms must update internal systems and vendor solutions to use the UKSL’s format and field structure.

The change in list structure does not alter the substantive scope of UK asset-freeze or financial sanctions obligations: the ownership and control test remains in force, so entities majority owned or controlled by a designated person are also captured, even if not named on the UKSL (see regulation 7 of the Russia (Sanctions) (EU Exit) Regulations 2019; OFSI continues to consult on possible changes to the control limb and practical guidance).

Ongoing updates and technical integration The UKSL is updated promptly as new designations or revocations are made. The official UKSL publications page includes change logs and versioning for integration with screening engines. Compliance teams should monitor the official page for technical format changes, and the Format Guide for the UK Sanctions List sets the structure and field definitions (as of December 2025).

Source: Moving to a single list for UK sanctions designations, 28 January 2026 — GOV.UK Source: Format guide for the UK Sanctions List — GOV.UK

UK law imposes explicit and evolving reporting obligations on companies and regulated professionals who encounter potential breaches of financial or trade sanctions. Recent amendments and regulatory guidance, particularly those in force from May and June 2026, have materially updated both the standards and thresholds that determine when a report must be made to the Office of Financial Sanctions Implementation (OFSI) or other competent authorities.

Scope of firms and applicability (current law, as of June 2026):

Under regulation 70 of the Russia (Sanctions) (EU Exit) Regulations 2019 (mirrored in other regimes), "relevant firms"—now specifically defined per The Sanctions (EU Exit) (Miscellaneous Amendments) Regulations 2026 (SI 2026/443)—include not just financial institutions and certain service providers, but (from May 2026) updated categories such as High Value Dealers and Art Market Participants, with new pound sterling thresholds (£10,000 per transaction or aggregate holding). This revision updates—and officially replaces—the previous euro-denominated reporting thresholds and firm types, bringing trade in line with new FCA/KYC rules for cross-sanctions compliance.

A relevant firm must inform OFSI as soon as practicable if, in the course of business, it knows or has reasonable cause to suspect:

• That a person is a designated person under UK sanctions law; or
• That a breach of financial sanctions has occurred.

The report must identify the subject, grounds for suspicion, and all available information, including the nature and value of funds or economic resources held. This duty extends to entities under the ownership or control of designated persons.

Material updates from May/June 2026:

• The Financial Sanctions General Guidance (updated 12 May 2026) and sanction regulations now require periodic and event-driven reporting by High Value Dealers and Art Market Participants for all dealings exceeding £10,000. Identification and Know Your Customer (KYC) standards are also enhanced for these groups, matching the regulatory amendments.
• The key update is the replacement of previous euro-denominated thresholds with the £10,000 GBP thresholds, as implemented by the 2026 Miscellaneous Amendments Regulations (in force 13 May 2026).
• Reports involving border activities are made to HMRC; those concerning provision of restricted services or cross-border trade without a physical border aspect are made to OTSI (as further detailed in May/June 2026 guidance and after OTSI’s 2026 remit expansion).
• The OFSI Consolidated List closure on 28 January 2026 remains effective: all compliance and reporting references must now use the UK Sanctions List Unique ID.

Continuing obligations and penalties: Firms must provide prompt updates to OFSI or OTSI if reportable circumstances change. There are parallel duties for reporting credits or transactions relating to frozen accounts. Designated persons have a separate statutory duty to report the nature, value, and location of assets held worldwide, with a £10,000 value threshold for reporting changes—recently confirmed and clarified in OFSI’s May 2026 guidance.

Failure to report without reasonable excuse is a criminal offence (regulation 80), punishable by up to 7 years' imprisonment.

Primary authority explicitly updated:

• The 2026 Miscellaneous Amendments Regulations (in force 13 May 2026) redefine “relevant firm,” clarify the pound sterling monetary threshold, and align UK reporting with other international frameworks.
• Financial sanctions general guidance (OFSI) updated 12 May 2026 incorporates updated scope, reporting triggers, and examples, especially for new firm categories and pound sterling thresholds.

Source: The Russia (Sanctions) (EU Exit) Regulations 2019, regulations 70–72, 70A (post-Aug 2024 and post-May 2026 amendments) Source: Sanctions and Anti-Money Laundering Act 2018, s.21 Source: The Sanctions (EU Exit) (Miscellaneous Amendments) Regulations 2026 Source: The Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024 Source: UK financial sanctions general guidance — GOV.UK, updated 12 May 2026 Source: The UK Sanctions List — GOV.UK

The United Kingdom prohibits the provision of trust services to Russian-connected persons and designated individuals or entities under Part 8A of the Russia (Sanctions) (EU Exit) Regulations 2019 (as amended). These trust services sanctions, introduced 16 December 2022, are a central part of the UK's response to Russia’s invasion of Ukraine and extend to a broad range of trust or company service providers (TCSPs). The rules apply to acts done in the United Kingdom and to acts done by UK persons anywhere in the world, creating an extraterritorial compliance exposure for UK-based fiduciaries, company administration firms, and other TCSPs.

Scope of the prohibition and definitions

Under regulation 18C, any person must not provide trust services to (a) a person connected with Russia, or (b) a designated person, unless a relevant exception or licence applies. Trust services are defined by regulation 18B to include:

• Creating a trust or similar arrangement,
• Providing a registered office, business address, correspondence address, or administrative address for a trust or similar arrangement,
• Acting or arranging for another person to act as trustee, nominee, or similar,
• Providing or arranging for the provision of a beneficiary, protector, or equivalent position in a trust.

A “person connected with Russia” means (reg. 19A) an individual who is ordinarily resident in Russia, is located in Russia, or is a national of Russia; or an entity incorporated or domiciled there. The prohibition does not extend to the provision of trust services to a person who holds British citizenship or is ordinarily resident in the United Kingdom, even if otherwise falling within the Russian nexus.

The prohibition captures both direct and indirect provision; arranging or facilitating a covered trust service is itself a breach if it results in a covered act.

Exceptions, licensing, and transition

The regulations provide licensing grounds mirroring those available in other sanctions contexts—humanitarian assistance, legal services, compliance with legal or regulatory obligations, and fulfilment of obligations already in existence prior to commencement of the prohibition. Transitional provisions allowed trust services relationships established before 16 December 2022 to continue until 31 May 2023, after which providing such services without a licence is strictly prohibited.

Exceptions are narrow and generally cover pre-existing trusts (fully established and administered before the prohibition date), actions required by court order, or acts required by UK law. Practitioners must carefully check whether a claimed exception applies. OFSI guidance offers practical compliance examples, but practitioners must closely follow the literal text for each exception or licensing ground.

Enforcement and compliance risk

Breaching the trust services sanctions is a criminal offence, punishable by up to 7 years’ imprisonment or an unlimited fine. OFSI may also impose strict liability civil penalties under the Policing and Crime Act 2017. Both the FCA and HMRC have oversight roles for regulated firms; irregularities may result in investigations and published enforcement outcomes. Due diligence on settlors, beneficiaries, and all parties to the arrangement is essential to avoid inadvertent breaches.

Source: The Russia (Sanctions) (EU Exit) Regulations 2019, Regulation 18C — Trust services Source: UK financial sanctions general guidance — GOV.UK Source: Russia sanctions: statutory guidance — GOV.UK

A general licence is a written permission issued by the Office of Financial Sanctions Implementation (OFSI) under the Sanctions and Anti-Money Laundering Act 2018 (SAMLA) or regime-specific regulations, permitting any person meeting its published terms to engage in activities that would otherwise be prohibited by UK financial sanctions. This approach is distinct from specific licences (granted to a named applicant for a particular transaction or period). Any entity or person within the scope who complies with a general licence’s terms may rely upon its permission, for as long as the licence remains in force.

Statutory authority, material updates (effective May–July 2026) Section 15(3) of SAMLA 2018, together with enabling regulations in each regime (notably regulation 64 of the Russia (Sanctions) (EU Exit) Regulations 2019), provides Ministers with authority to issue general licences. The Sanctions (EU Exit) (Miscellaneous Amendments) Regulations 2026 (SI 2026/443, in force 13 May 2026) made several material changes: (1) all monetary thresholds—including those relevant for notification of reliance—are now specified in pounds sterling (£), replacing euros in prior versions; (2) the licensing ground for “prior obligations” is broadened, so that OFSI’s statutory authority to license transactions covers both routine and non-routine payments required to discharge obligations incurred before designation; (3) regime regulations and general licence conditions now allow statutory notices and communications to be given electronically, without prior written agreement, facilitating compliance in practice.

Publication, notification, and record-keeping All current, amended, expired, and revoked general licences are published on OFSI’s General Licences Register (GOV.UK). Each general licence sets out (a) permitted class(es) of users, (b) specific acts/transactions authorised, (c) the period of validity, (d) mandatory notification deadlines and method (most require users to notify OFSI via dedicated forms or email within a stated period—typically within 7, 14, or 30 days of use), and (e) minimum record-keeping requirements. Where an explicit period is not stated, practitioners should default to six years per statutory guidance and licence conditions (recent general licences reaffirm this). Failure to meet these requirements nullifies lawful reliance and constitutes a breach of financial sanctions law.

Scope: compliance, amendments, revocation General licences may be amended, suspended, or revoked by OFSI at any time. Reliance after expiry or revocation does not shield the user from liability. The General Licences Register is the authoritative reference for the current scope and conditions of all general licences. Notably, the register as of July 2026 includes newly issued and amended general licences, such as updated permissions for legal services and certain payment flows for sanctioned Russian entities (e.g., INT/2026/9559192 and several others issued in June–July 2026), in response to evolving compliance priorities and market impact.

Practitioners must always check the Register and the detailed terms of each general licence for the regime and time of intended reliance. OFSI’s general licences regime is governed in section 6.9 of the UK financial sanctions general guidance (updated May 2026). OFSI general guidance and each current general licence text are the compliance standard in effect after the 2026 statutory amendments.

Material changes:

• Currency thresholds for notification and reporting are now in pounds sterling (from 13 May 2026).
• "Prior obligations" as a licensing ground is broadened (SI 2026/443).
• Electronic notification/communications are valid without prior written consent.
• Numerous new and amended general licences have been issued (June–July 2026).

Source: Sanctions and Anti-Money Laundering Act 2018, s. 15 Source: The Russia (Sanctions) (EU Exit) Regulations 2019, reg. 64 Source: The Sanctions (EU Exit) (Miscellaneous Amendments) Regulations 2026 Source: UK financial sanctions general guidance, section 6.9 — GOV.UK, updated 12 May 2026 Source: OFSI General Licences and Register — GOV.UK

The UK’s transport sanctions regime—targeting ships, aircraft, and related services—is governed by a unique set of prohibitions and civil enforcement tools distinct from financial or trade sanctions. The civil penalty and enforcement framework is set out in the Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024 (SI 2024/948, known as TASSCER), which came into force on 10 October 2024. The regulations were introduced under the Sanctions and Anti-Money Laundering Act 2018 to plug longstanding gaps in sanctions compliance for maritime and aviation activities, especially in response to Russian aggression against Ukraine.

Scope of prohibitions TASSCER applies to any person who breaches prohibitions on the ownership, registration, charter, use, or insurance of designated ships or aircraft, as contained in UK sanctions regulations (notably, the Russia (Sanctions) (EU Exit) Regulations 2019 and similar regimes for Iran, Belarus, and others). Prohibitions typically include:

• Owning, controlling, or chartering a designated vessel or aircraft;
• Registering or maintaining a registered ship under the UK flag, or an aircraft in the UK registry, when designated or controlled by a designated person;
• Providing insurance, reinsurance, bunkering, technical, or financial services to a designated ship or to shipping companies connected with sanctioned countries;
• Facilitating or permitting port entry, loading/unloading, or overflight by vessels or aircraft subject to UK sanctions restrictions.

The UK Sanctions List publishes all live designations, including flagged vessels and relevant aircraft, with update notifications accessible on GOV.UK.

Civil monetary penalties and enforcement TASSCER gives the Office of Trade Sanctions Implementation (OTSI, part of the Department for Business and Trade) the power to impose civil penalties on a strict liability basis: OTSI need only demonstrate, on the balance of probabilities, that a breach of transport or shipping sanctions occurred—there is no need to prove knowledge or intention. The permitted maximum civil penalty is the greater of £1 million or 50% of the estimated value of the ship or aircraft used in the breach (reg. 10). Procedural safeguards include a right to a Notice of Intent, 28 days to make written representations, and the ability to appeal to the Upper Tribunal (Tax and Chancery Chamber). Penalties can be imposed on entities or individual officers where neglect, consent or connivance is shown.

Criminal prosecution remains possible for egregious or deliberate breaches, prosecuted by HMRC. OTSI may refer cases to HMRC where intent, circumvention, or systemic failings are found. All enforcement actions (warnings, disclosure notices, penalties) are published on the Sanctions Enforcement Action page on GOV.UK.

Compliance exposure and lists Industry actors—including shipowners, charterers, registries, insurers, and port agents—must actively monitor the UK Sanctions List and check the Transport Sanctions: Civil Monetary Penalties guidance on GOV.UK for current enforcement practice, update cycles, and due diligence expectations in 2026.

Source: Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024, SI 2024/948 Source: Transport sanctions: civil monetary penalties — GOV.UK Source: The UK Sanctions List — GOV.UK

The United Kingdom’s “ownership and control” provisions apply financial and trade sanctions to entities that are not explicitly listed but are “owned or controlled directly or indirectly” by a designated person. This rule is central across modern UK sanctions regimes—most notably regulation 7 of the Russia (Sanctions) (EU Exit) Regulations 2019 (as amended). The effect is to extend asset-freeze and restriction obligations to a much broader set of companies, trusts, and structures beyond those named on the UK Sanctions List.

Ownership limb (the 50% rule): An entity is “owned” by a designated person if that person, alone or through others, directly or indirectly:

• holds more than 50% of the shares in the entity,
• holds more than 50% of the voting rights,
• or has the right, directly or indirectly, to appoint or remove a majority of the board of directors.

Chains of ownership through holding companies, nominees, or similar arrangements are included. Both direct and indirect holdings are considered, and aggregation applies if the designated person’s interests are spread over multiple layers.

Control limb: Even when the 50% ownership threshold is not crossed, an entity can be considered controlled by a designated person if that person “is able, directly or indirectly, to control or direct the entity’s affairs.” Regulation 7(4) lists practical scenarios, such as:

• the right to direct activities via constitutional documents, agreements, or voting arrangements,
• or where it is reasonable—having regard to all circumstances—to expect that the entity acts on the instructions, requests, or wishes of the designated person.

Indirect control includes influence via proxies, complicated voting arrangements, or contractual powers—even without formal ownership. The regulations leave “control” broad and fact-specific. OFSI’s general guidance underlines that compliance teams must consider all relevant facts and cannot rely solely on shareholding percentage. The ownership and control rule applies whether or not the controlled entity is named on the UK Sanctions List.

Compliance approach: Firms should conduct due diligence to identify not only direct relationships with designated persons, but also indirect relationships that could meet the ownership or control tests, using available information on ownership structures, governance, and practical influence. OFSI’s guidance recognises that the test is fact-specific and requires a risk-based, case-by-case assessment. Where uncertainty exists, the guidance recommends keeping evidence of inquiries and the basis for conclusions.

Both limbs—ownership and control—appear across most UK asset-freeze regimes, but practitioners should always verify the precise regulation in force for the relevant sanctions program.

Source: Russia (Sanctions) (EU Exit) Regulations 2019, regulation 7 Source: UK financial sanctions general guidance — GOV.UK

UK sanctions law expressly prohibits the intentional circumvention of core sanctions prohibitions. This anti-circumvention rule is most prominently codified in regulation 19 of the Russia (Sanctions) (EU Exit) Regulations 2019, which applies to prohibitions listed in that regulation.

Statutory scope (Regulation 19) Regulation 19 makes it a criminal offence for a person to knowingly and intentionally participate in activities the object or effect of which is (directly or indirectly) to circumvent specified core prohibitions, or to enable or facilitate a contravention of those prohibitions by another person. The underlying offences referenced in regulation 19 include, but are not limited to, the prohibitions on:

• dealing with frozen funds or economic resources (regulation 11);
• making funds or economic resources available (regulations 12–15);
• trade, shipping, and aircraft-related restrictions (multiple parts of the Regulations);
• providing trust services to designated persons or connected persons (regulation 18C, cross-referenced).

Regulation 19(2) explicitly criminalises not only direct breaches but also knowing and intentional acts that are designed to evade those prohibitions, or to assist another person in doing so. The test is both subjective (knowledge and intention required) and objective (the effect of the act).

Penalties A person guilty of an offence under regulation 19 is liable on conviction to the same penalty as for breach of the underlying prohibition, as set in each provision—typically, up to seven years’ imprisonment, an unlimited fine, or both, as specified in the enabling legislation and confirmed in regulation 78 (penalties) of the 2019 Regulations.

Examples of conduct Acts caught by the circumvention prohibition include, for example, deliberately using complex transaction routes through intermediaries to hide Russian end-users, structuring deals to obscure the ultimate counterparty, or knowingly re-labelling goods to conceal destination. Note that negligent or inadvertent failures—such as missing red flags—are not themselves circumvention unless proven to be knowing and intentional.

Contractual compliance strategies The UK Government encourages use of contractual safeguards like the "No-Russia Clause" to restrict onward supply of sensitive goods to Russia, as described in relevant guidance. However, use of such clauses is not a statutory requirement and does not relieve the parties of independent responsibility to avoid circumvention. The No-Russia Clause guidance (May 2024) details common risk-mitigation approaches but does not itself create binding legal duties.

Reporting duties Reporting obligations for circumvention are not imposed on all firms equally. Only "relevant firms" within the meaning of the regulations (e.g., FCA-authorised firms for financial sanctions) have explicit statutory duties to report known or suspected breaches, as detailed in each regime. No blanket duty exists on all businesses or individuals to report suspected circumvention, though voluntary disclosure is encouraged and may be considered a mitigating factor.

Source: Russia (Sanctions) (EU Exit) Regulations 2019, regulation 19 Source: Russia (Sanctions) (EU Exit) Regulations 2019, regulation 78 Source: Guidance: No-Russia Clause — GOV.UK

Humanitarian exemptions and licensing grounds form a critical operational carve-out in the UK's post-Brexit sanctions structure. Every UK sanctions regime under the Sanctions and Anti-Money Laundering Act 2018 (SAMLA) provides for licensing of activities otherwise prohibited where necessary for legitimate humanitarian assistance. The substantive terms and process are set by the specific regime regulations—most extensively, the Russia (Sanctions) (EU Exit) Regulations 2019.

## Statutory authority and regulatory language Schedule 5 to the Russia Regulations (as template for other regimes) permits the Office of Financial Sanctions Implementation (OFSI), or for relevant trade sanctions the Office of Trade Sanctions Implementation (OTSI), to grant a licence if “necessary to enable anything to be done in connection with the performance of a humanitarian assistance activity conducted by or on behalf of the United Nations, or an impartial humanitarian organisation, or to prevent or alleviate serious harm to human health or safety.” The list of qualifying grounds is set out in Schedule 5, paragraph 5 (humanitarian assistance), and similar provisions apply in other sanctions regimes. Definitions of “humanitarian assistance activity” and “impartial humanitarian organisation” are taken from the plain meaning in guidance; the regulation does not give a fixed list or definition—applicants must describe their activity in light of the underlying purpose.

## Licensing procedure and compliance There is no standing exemption—permissions for humanitarian activities must be obtained by written licence granted in advance. Applicants must identify the precise licensing ground (by paragraph and schedule), describe the proposed acts, list affected persons, and provide supporting documentation. The agency may request further evidence. The terms of the licence will set conditions such as eligible activities, counterparties, permitted payments, and duration; violations of these conditions constitute a breach of financial sanctions law. Requirements for post-licence reporting and record-keeping are set by the licence text itself and the financial sanctions general guidance; practitioners must comply with both statutory language and any additional OFSI/OTSI-imposed terms.

## Guidance and interpretive notes OFSI’s financial sanctions general guidance (section 6.13) confirms that the licensing ground for humanitarian assistance is interpreted strictly and is available only to the extent specified in the regime’s schedule. Applicants should review regime-specific statutory guidance for clarifications; where regulations or guidance are silent, the agency applies the ordinary language and the test of necessity in context. There are no blanket guarantees against refusal or revocation: each licence is discretionary and must be used exactly as granted. General licences for humanitarian relief can be issued in emergencies, but their scope and term are narrow and published on GOV.UK.

Where the underlying law, statutory guidance, or general guidance is silent on a point, practitioners must not assume broader permissions apply. Matters not explicitly covered by regulation or guidance remain within regulator discretion.

Source: The Russia (Sanctions) (EU Exit) Regulations 2019, Schedule 5 Source: UK financial sanctions general guidance, section 6.13 — GOV.UK Source: Russia sanctions: statutory guidance — GOV.UK

A person or entity designated under a UK sanctions regime, such as listed on the UK Sanctions List, holds clear statutory rights to contest that designation by ministerial review and court challenge under the Sanctions and Anti-Money Laundering Act 2018 (SAMLA).

Ministerial Review (SAMLA 2018, s.23) Under section 23 of SAMLA 2018, any designated person may make a formal request for a Minister to review their designation or the application of prescribed sanctions measures. The request must be considered “as soon as reasonably practicable.” The applicant should specify why they believe the designation criteria are not (or are no longer) met—common grounds include: mistaken identity, changed circumstances, or error in evidence relied on. The Minister must conduct a fresh review and, per section 23(3), may require specified information from the applicant or other persons to carry out that review. Upon review, the Minister must revoke the designation or measure if satisfied that the legal test for designation/measure is no longer met. Otherwise, the Minister must confirm it and provide reasons.

Annual Review (SAMLA 2018, s.24) Regardless of any specific request, the Minister is also under a continuing statutory duty (section 24) to review all existing designations and measures at least once every 12 months, determining whether each still meets the applicable criteria and varying or revoking those that do not.

Judicial Challenge (SAMLA 2018, s.38) If dissatisfied with the outcome of ministerial review, the applicant may apply to the High Court (or Court of Session in Scotland) to review the decision under section 38. The court may set aside, vary, or direct reconsideration of the designation. The SAMLA regime does not prescribe a full merits hearing but operates as a judicial review—scrutinising the lawfulness, reasonableness, and procedural regularity of the decision. Regime-specific regulations may provide for additional court procedures; for certain designations involving national security, closed material procedures (special advocates) may be engaged as set out in regime regs, not the primary Act.

The review and challenge rights described here are set out in statute and are reflected in published FCDO/OFSI guidance for each sanctions program. Program-specific variations—such as deadlines, form of review, or special procedures—are governed by the relevant regime’s regulations in addition to SAMLA.

Source: Sanctions and Anti-Money Laundering Act 2018, sections 23–25, 38 Source: UK Sanctions List — GOV.UK