Sanctions tracker – round-up of recent UK sanctions developments

New UK designations

The UK has recently announced two further rounds of Russia designations:

• On 18 July, the UK announced the addition of three units of the Russian military intelligence agency ("GRU") and 18 military intelligence officers, along with African Initiative (a social media content mill) and three individuals associated with this organisation. The UK government has also published a new factsheet on GRU cyber and hybrid threat operations. These designations were made under the UK's Russia and Cyber sanctions regimes.

• On 21 July, the UK announced the addition of a further 137 new sanctions targets relating to the Russian oil and energy sectors. These comprise 135 oil tankers (which are now "specified ships") and the entities Intershipping Services LLC and Litasco Middle East DMCC.

UK and EU lower Oil Price Cap

On 18 July, the UK announced that, together with the EU, it would be lowering the Oil Price Cap applicable to crude from $60 to $47.60 per barrel. The revised cap will come into effect at 23:01 on 2 September 2025. For any trades with an effective date of contract before this date (and which are compliant with the existing $60 cap), there will be a wind-down period of 45 days, ending at 23:01 on 17 October 2025.

The Office of Financial Sanctions Implementation ("OFSI") has updated its General Licence ("GL") on the Oil Price Cap and published new FAQs on the Oil Price Cap.    

New UK sanctions regime targeting irregular migration comes into force

Following the UK government's January announcement of a new proposed "people smuggling" sanctions regime, the new regime came into force on 23 July.

Known as the Global Irregular Migration and Trafficking in Persons sanctions regime, the new sanctions are intended to target individuals and entities involved in people smuggling and driving irregular migration to the UK, and cover a range of different activities including supplying small boats explicitly for smuggling, sourcing fake passports, facilitating illicit payments, people-smuggling via lorries and small boats, and gang leaders.

The initial round of designations under this new regime targets a total of 20 individuals and five entities (full details can be found here).

The new restrictions largely take the "standard" asset freeze format used in other sanctions regimes (although see below in relation to an additional licensing ground particular to this regime) and are set out in the Global Irregular Migration and Trafficking in Persons Sanctions Regulations 2025 (the "2025 Regulations", which came into force on 23 July).

OFSI has also amended its general guidance on financial sanctions to provide further guidance on the licensing ground relating to designated money service businesses ("MSBs"), which is available in the 2025 Regulations. Under this ground, OFSI may issue a licence to allow funds to be returned to non-designated persons from a designated MSB providing that certain conditions are met (including that the designated MSB is registered in the UK for money laundering purposes and that the payment would not be contrary to the interests of the prevention or detection of serious crime in the UK or elsewhere).

OFSI consultation on financial sanctions enforcement

On 15 May 2025, OFSI published a policy paper setting out the results of a cross-government review of sanctions implementation and enforcement (see our previous post for further detail). In response to a number of conclusions from that review, on 22 July 2025, OFSI announced a consultation on the proposed measures to enhance its civil sanctions enforcement powers (the "Consultation").

The Consultation outlines several proposed measures to strengthen OFSI's civil enforcement powers and resolve cases more efficiently. In summary, the proposed measures involve:

• Increased transparency and guidance on OFSI's case assessment process, including a new "case assessment matrix" for penalty calculations. The case assessment matrix considers the severity of the breach and the conduct associated with the breach, classifying the former as low/medium/high and the latter as mitigating, neutral or aggravating in order to inform the likely case assessment outcome (which then impacts OFSI's view of the most appropriate means of resolving a case).

• Replacement of the current voluntary disclosure discount with a "Voluntary Disclosure and Co-operation" discount of up to 30% where firms (i) voluntarily self-report breaches promptly, (ii) subsequently provide OFSI with a complete account of the breach, and (iii) co-operate with OFSI's investigation. The Voluntary Disclosure and Co-operation discount would apply to cases considered to be "Serious" and "Most Serious".  The Consultation states that the current approach of awarding a 50% reduction (in cases classified as "Serious") to recognise prompt and complete voluntary self-disclosure can risk undermining the penalty amount in some cases.

• A settlement scheme for the resolution of enforcement cases, to be offered at OFSI's discretion in appropriate cases. Under the proposed scheme, where OFSI has concluded that a penalty is likely to be the most appropriate enforcement outcome following its investigation, it may (in appropriate cases) invite the recipient to enter into settlement discussions over a period of 30 business days. Where settlement discussions are successful, OFSI would apply an additional 20% discount to the settlement amount in addition to any Voluntary Disclosure and Co-operation discount. Communications regarding settlement would be made on a without prejudice basis and it is proposed that any settlement agreed to by the recipient would require: (i) an acceptance of OFSI's finding that a breach of financial sanctions has occurred, (ii) a commitment to pay the agreed monetary penalty amount, and (iii) a commitment to forgo the right to request a Ministerial Review of the matter / to appeal the penalty to the Upper Tribunal. However, in relation to (i), the Consultation notes that OFSI is interested in views on incentives other than penalty discounts, one of which could be for a company to avoid admitting liability when agreeing a settlement, with the published notice referring to "apparent" or "suspected" breaches of financial sanctions.

• An Early Account Scheme ("EAS") which would allow investigation subjects to submit a factual account of the breach alongside supporting materials and evidence early in the investigation process, thereby expediting the investigation. Although voluntary self-disclosure is not a pre-requisite to availability of the EAS, the Consultation indicates that OFSI considers that it is unlikely that it would permit access to the EAS for a firm that had failed to report suspected breaches of which it was aware. Use of the EAS would involve the provision of material which is significantly different in detail and scope to that which OFSI expects in a voluntary self-disclosure (the Consultation suggests a timeframe of six months to prepare the account), and would only be available to entities (not individuals). In cases which result in a monetary penalty, a 40% discount could be applied to the penalty amount (as adjusted by the Voluntary Disclosure and Co-operation discount).

• Publication of indicative penalty amounts for certain sanctions breaches (e.g. non-compliance with reporting obligations and breaches of licence conditions), and implementing a fixed penalty scheme for those breaches through legislation.

• Increasing the statutory maximum penalties that may be applied for financial sanctions breaches.

The Consultation invites responses from stakeholders, including businesses and financial institutions, and will close on 13 October 2025. OFSI will publish a response "in due course", outlining the next steps.

OFSI imposes monetary penalty

OFSI has announced the imposition of a monetary penalty of £300,000 on a UK company - Markom Management Limited ("MML") - in respect of a 2018 breach of the pre-Brexit Ukraine misappropriation and human rights sanctions regime.

The penalty is in relation to a payment of £416,590.92 made to a designated person; OFSI concluded that MML knew or had reasonable cause to suspect that its actions would result in funds being made available to a designated person (the activity that is the subject of this penalty occurred before the introduction of OFSI's ability to impose penalties on a strict liability basis). The transfer of funds to the designated person was in respect of an overpayment that had previously been made from a client of a Cyprus company within MML's group to the designated person. When the overpayment was identified, MML issued a transfer instruction to the relevant bank for the funds to be transferred from the client's account to the account of the designated person.

MML notified OFSI of this breach, having identified it through an internal review commissioned as a result of third party activity. OFSI's notice states that, as a result of that third party activity and OFSI's engagement with the third party, its investigation did not commence until almost three years after MML's notification.

The aggravating factors identified by OFSI in this case included that MML did not take any steps to verify its understanding of the relevant sanctions, instead prioritising making the payment in haste. MML also had policies in place that should have meant that employees were aware of relevant sanctions issues, but OFSI found these to be inadequate because there were no policies or controls in place to manage the sanctions risk of the informal transnational working practices within the group – the context within which the breach took place. These factors were weighed against mitigating factors including MML's steps to improve sanctions compliance, the fact that the breach was a one-off and MML's disclosure and cooperation (albeit the disclosure was not considered to have met the criteria for a voluntary discount reduction in penalty). Overall, the case was assessed to be "serious".

OFSI initially notified MML of its intention to impose a penalty of £400,000, however this was reduced to £300,000 following receipt of representations and additional information from MML. The reduced penalty amount was upheld following a delegated Ministerial Review.

UK designated person convicted for failing to provide information to OFSI

The director of a UK charity, who is subject to an asset freeze under the UK's domestic counter-terrorism sanctions regime, has been convicted of a breach of the relevant sanctions regulations for failing to provide OFSI with information. She was reportedly asked to complete a questionnaire following her designation, which included questions about her assets and sources of income in the UK.

At the time of writing, sentencing in the case had been adjourned to later this month.

OFSI publishes threat assessment on cryptoassets

OFSI has published the latest in its series of sectoral threat assessments, this time dealing with cryptoassets (the "Threat Assessment"). The Threat Assessment notes that cryptoasset firms accounted for just over 7% of all suspected financial sanctions breaches reported to OFSI since January 2022, with the vast majority of reports made since April 2024. Interestingly, the Threat Assessment states that over 90% of cryptoasset-related breach reports made to OFSI relate to Russia, with the remaining 10% relating to Iran, i.e. no cryptoasset-related reports have been made in relation to other sanctions regimes.

In addition to identifying particular sanctions risks and evasion typologies / red flags associated with the sector, the Threat Assessment also sets out OFSI's recommendations on best practice reporting within the sector (which will be relevant both to cryptoasset firms and to firms in any other sector interacting with them / making cryptoasset-related reports).  

OFSI general licence regarding designated brokers

OFSI has published a new GL (INT/2025/6641960) in respect of the Russia and Belarus financial sanctions regimes which allows non-designated persons who have made investments through designated brokers to transfer their funds to a non-designated broker. The GL only applies where the only designated party involved in the transaction is the designated broker.

Any parties wishing to rely on the GL should note that it contains reporting requirements and also deals with how institutions should update their frozen asset reporting if affected by transactions authorised by the GL. The GL will expire on 16 July 2026.  

New OFSI reporting forms

OFSI has published a suite of new online reporting and application forms covering (among other things) financial sanctions licence applications, reporting suspected breaches and reporting frozen assets. These forms are submitted online (as opposed to the previous forms which were completed and then emailed to OFSI) and OFSI considers them to be "a significant step forward in [its] drive to modernise and streamline [its] services, making our processes clearer, faster and more accessible for everyone who needs to contact us".

A list of all questions / fields in each of the new forms can be downloaded to allow preparation of completed responses in advance and can currently be emailed to OFSI, although email submission will be phased out in the future.

OFSI publishes additional FAQs

OFSI has updated its list of FAQs on financial sanctions to include new FAQs on: (i) the Oil Price Cap as mentioned above; and (ii) OFSI's application of the term "domiciled".

Recent sanctions litigation decisions

There have been a number of interesting sanctions litigation decisions in recent weeks, as summarised below, with links to further reading for those with an interest in this area:

• This post from our banking litigation colleagues examines a recent decision highlighting that courts will not easily allow sanctioned parties to use sanctions as a shield against compliance with court orders.
• This decision considers the concept of "prior obligations" in sanctions regulations, the relevance of EU sanctions in interpreting UK sanctions, and the scope of the "reasonable belief" defence under s.44 of the Sanctions and Anti-Money Laundering Act 2018.
• This post considers a decision demonstrating the English court's willingness to apply the Ralli Bros principle and public policy in the context of Russian sanctions cases.