Sanctions tracker – round-up of recent UK sanctions developments

Cross-government review of sanctions implementation and enforcement

The UK government has published a policy paper setting out the results of a cross-government review of sanctions implementation and enforcement which was launched last year to consider ways to further strengthen the UK's sanctions framework. The aims of the review were to: (i) improve and facilitate compliance, (ii) increase the deterrent effect of enforcement, and (iii) invigorate the cross-government toolkit.

The conclusions of the review have been categorised into areas that the government is committed to implementing this financial year, and those that require a longer-term assessment of the costs, risks, benefit and likely impact. There is currently no information available on the conclusions falling into the latter category, but the policy paper summarises the points that fall into the former category and on which further developments should be expected.

We have summarised below the points that may be of particular interest to readers.

• Feedback identified that government guidance should be better organised, modern and more easily searchable. This will be addressed by a comprehensive update to sanctions pages and statutory guidance on gov.uk.
• The UK Sanctions List and Consolidated List of asset freeze targets will be consolidated into a single sanctions list covering all UK designations.
• In response to the challenges that the ownership and control test poses to effective sanctions compliance, the government has committed to "deliver measures to provide further clarity on ownership and control" (although there is currently no further detail on what these measures will entail).
• A government-wide sanctions enforcement strategy will be published.
• The government has committed to a public consultation on:
  • an early settlement scheme for breaches of financial sanctions; and
  • an accelerated civil penalty process for certain financial sanctions breaches. This is based on the conclusion that swifter penalties for certain types of financial sanctions offences (which are not specified) will deliver more efficient and proportionate outcomes and drive compliance with reporting and licensing requirements, while freeing up resources to focus on the most complex, serious and deliberate breaches of sanctions.
• Legislation will be updated to ensure that workers who disclose information relating to breaches of sanctions to the relevant government departments can qualify for whistleblowing protections.

In relation to the final bullet, the Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2025 (the "Order") was laid before Parliament on 21 May and will come into force on 26 June, expanding whistleblower protections in respect of sanctions-related disclosures to HM Treasury and the Secretaries of State for Transport, and Business and Trade.

It remains to be seen precisely how the remaining steps will be implemented in practice, but the prospect of further guidance and a better understanding of sanctions enforcement strategy will no doubt be attractive to companies seeking to ensure that they comply with UK sanctions.

First UK criminal conviction for breach of financial sanctions

The UK's first criminal sanctions case has concluded, with Dmitrii Ovsiannikov, the former Russian-appointed governor of Sevastopol, found guilty of sanctions circumvention and money laundering offences. Mr Ovisannikov is a designated person subject to UK asset freezing sanctions and travelled to the UK in February 2023. Whilst in the jurisdiction, he applied for a bank account into which his wife transferred £76,000 to enable Mr Ovisannikov to pay a deposit on a car. When the bank account was subsequently frozen, Mr Ovisannikov's brother, Alexei Owsjanikow, bought the car and insured it for Mr Ovisannikov to drive. Mr Owsjanikow also paid school fees for his brother's children and allowed his brother the use of his debit card.

These payments amounted to a breach of the UK asset freeze and both brothers were convicted of sanctions circumvention offences. Mr Ovisannikov was sentenced to 40 months' imprisonment, and Mr Owsjanikow to 15 months' (suspended for 15 months).

Both the National Crime Agency and Crown Prosecution Service have issued press releases on the case, stating that "we hope this sends a clear message that the CPS and NCA investigators will work closely together to robustly seek the convictions of sanctions busters".

OFSI imposes financial penalty for breach of information obligations

The Office of Financial Sanctions Implementation ("OFSI") has imposed a civil monetary penalty on a company for failure to respond to an information request issued by OFSI.

As part of a wider investigation, OFSI became aware that Svarog Shipping & Trading Company Limited ("Svarog") had transacted with a subsidiary of a designated person and issued a request for information ("RFI") pursuant to its statutory powers under the Russia (Sanctions) (EU Exit) Regulations 2019 (the "Russia Regulations"). Svarog did not respond to OFSI by the specified deadline and only responded once OFSI contacted the company's auditors. Svarog failed to provide a reasonable excuse for the delay.

OFSI imposed a monetary penalty of £5,000. Its notice confirms that Svarog did not make any representations to OFSI in relation to the penalty, and did not seek a review of OFSI's decision.

OFSI has emphasised the importance of timely and accurate responses to RFIs issued by OFSI (see also our recent update in respect of a disclosure notice issued in relation to failure to respond to RFIs) and has also published an accompanying blog on the topic.

New UK designations

The UK has announced a new round of Russia sanctions, with the following added to the designated persons list:

• entities and individuals involved in supporting the Russian defence sector;
• individuals involved in spreading Russian disinformation;
• entities involved in Russia's financial sector;
• entities and individuals involved in the Russian energy sector. This includes a British national said to have procured ships for Russia's shadow fleet;
• individuals acting on behalf of or at the direction of persons involved in the Russian energy sector; and
• an individual involved in Russia's information, communications and digital technologies sector.

The UK has also specified a further 18 ships in the shadow fleet.

OFSI has published two general licences in connection with these new designations. These relate to: (i) the wind-down of transactions involving St Petersburg Currency Exchange and Non-bank Credit Organization Joint-Stock Company Petersburg Settlement Center until 19 June 2025 (General Licence INT/2025/6275812); and (ii) the making of insurance premium payments to the Deposit Insurance Agency (General Licence INT/2025/6279615).  

New sanctions legislation

The Russia (Sanctions) (EU Exit) (Amendment) Regulations 2025 (the "Amending Regulations") were laid before Parliament on 23 April 2025 and came into force on 24 April 2025. The Amending Regulations amend the Russia Regulations to impose further trade sanctions on Russia.

In particular, the Amending Regulations introduce the following key changes:

• the expansion of the Russia Regulations' existing restrictions on the supply of "energy-related goods", "G7 dependency and further goods" and "Russia's vulnerable goods" to also cover energy-related technology / G7 dependency and further technology / Russia's vulnerable technology, with the addition of specific restrictions on the transfer of the relevant technologies to a person connected with Russia or a place in Russia;
• amendments to the existing restrictions on Russian-origin diamonds to include restrictions on certain synthetic diamonds manufactured in Russia and processed in a third country;
• the introduction of new restrictions on the making available or transfer of "sectoral software and technology", together with ancillary restrictions on related technical assistance, financial services and brokering services. Items defined as "sectoral software and technology" are listed in a new Schedule 3IA to the Russia Regulations; and
• the addition of certain additional items to the Russia Regulations' existing schedules of goods subject to export or import restrictions.

The Explanatory Memorandum notes that a decision was taken not to apply the technology transfer provisions to non-industrial and raw materials included in some of the schedules to the Russia Regulations, as these are less relevant to Russia's ability to fund and wage its war.

Following the introduction of the Amending Regulations, the Office of Trade Sanctions Implementation has published two new guidance documents on complying with sectoral software sanctions and complying with technology transfer sanctions. A new General Trade Licence has been issued in respect of sanctioned synthetic diamonds.

OFSI updates FAQs

OFSI has published new financial sanctions FAQs (numbers 146 to 148). These address the mergers of sanctioned entities Rosbank PJSC and Bank Otkritie, which have now ceased to exist as separate entities. Importantly, the FAQs say that those holding live OFSI licences referencing Rosbank or Bank Okritie should immediately request an amendment of the licence to refer to the relevant post-merger entity, as OFSI would consider the continued use of the existing licence to be a breach of sanctions.

OFSI publishes new threat assessments

OFSI has continued with its range of sectoral threat assessments, publishing assessments in relation to the sanctions threats associated with legal services and the property sector. Although sector-specific, the lists of sanctions evasion red flags and typologies in these publications may be of wider interest to other sectors.