The Office of Financial Sanctions Implementation (OFSI) has published guidance (the Guidance) following the publication of the Sanctions (EU Exit) (Miscellaneous Amendments) (No.2) Regulations 2024 (the Regulations) on 14 November 2024. OFSI is the body with regulatory oversight of the financial sanctions regime and is responsible for its implementation and enforcement within the UK.  

Among a number of changes to be introduced by the Regulations is the expansion of the definition of “relevant firms” required to report suspected sanctions breaches to include insolvency practitioners (IPs). From 14 May 2025, IPs will be required to report to OFSI, as soon as practicable, if they know, or have reasonable cause to suspect, that a person is a designated (i.e. sanctioned) person or has otherwise committed a breach of financial sanctions regulations. Where a designated person is a customer of the IP/their firm, a report must also be made in relation to funds or economic resources held on behalf of the designated person. However, IPs will only be required to report to OFSI where knowledge of a potential breach of the sanctions regime came to their attention “in the course of carrying on their business”. Within the context of an IP’s role, this means when acting as an insolvency practitioner - for example, when acting as a liquidator, an administrator or administrative receiver of a company. The Guidance notes that where IPs are not acting in this capacity, and are undertaking work or roles which do not constitute insolvency practitioner business (such as acting as a LPA receiver, receiver manager or undertaking an independent business review), IPs will not be subject to these reporting obligations.  

The Guidance confirms OFSI’s view that the extension of the reporting obligations will encourage better sanctions compliance and highlight potential loopholes in the existing regime. From a practical perspective, the Regulations mean that IPs will need carefully to consider the nature and scope of any work they undertake going forwards, and crucially, the extent to which this may fall within the scope of the Regulations and trigger the obligation to report suspected sanctions breaches.