This article looks at the enforcement of the UK sanctions regime. It sets out:

• A brief overview of the UK sanctions regime and potential penalties for breaches.
• A discussion of enforcement trends – these show that the UK is moving towards a position of more active enforcement.
• Practical considerations for businesses operating with a UK nexus.

The UK maintains a wide-ranging and complex sanctions regime. It applies to companies incorporated under UK law, UK nationals and conduct in the UK. It includes both financial sanctions – which in general terms prohibit dealing with "designated persons" and persons controlled by them or acting on their behalf – and trade sanctions – which in general terms prohibit dealing in certain goods and services in relation to a particular country. The framework for UK sanctions is contained in The Sanctions and Anti-Money Laundering Act 2018, with detailed rules set out in secondary legislation which may be targeted against particular countries (e.g. Russia, North Korea) or particular activity (e.g. terrorism, cybercrime). Whilst the UK sanctions regime maintains a significant degree of alignment with the EU regime there is some divergence: activities prohibited under UK sanctions are not necessarily prohibited under EU sanctions and vice-versa. 

Whilst compliance with UK sanctions will be a particularly important consideration for certain sectors (e.g. financial services, shipping, energy) the extent of the UK sanctions regime, in particular against Russia, means that it is relevant to a very wide range of companies doing business in the UK – including non-financial service providers. For example, we have advised on:

• The prohibition of the provision of IT consultancy services to persons in Russia or Russian companies.

• The prohibition of the provision of legal advisory services where those services would enable or facilitate certain activity prohibited by UK sanctions against Russia.

• Requirements on letting agents to report activity involving "designated persons". 

Compliance with UK sanctions law is overseen by a variety of regulators, including the Office of Financial Sanctions Implementation (OFSI), the Office of Trade Sanctions Implementation (OTSI) and HM Revenue & Customs (HMRC). Penalties for breaches of UK sanctions legislation are in theory significant, including maximum prison sentences of up to 10 years, unlimited criminal fines, and civil fines that can be imposed on a strict liability basis (i.e. without the need to show knowledge or reason to suspect a breach) of up to the higher of £1m or 50% of the value of the underlying breach. Companies named publicly as having breached UK sanctions could also suffer significant reputational damage.

The question that has been consistently asked of the UK sanctions regime is whether the theory of significant consequences for breaches matches the practice of enforcement action. As is typical for regulators – and particularly in response to recent UK government pressure on regulators - they face a difficult balancing act in relation to the enforcement of complex and wide-ranging legislation that presents practical compliance challenges, especially for smaller businesses. There may be a general expectation from government that active enforcement should take place, but not in a way that is "anti-growth" or "anti-business", because for example fines in borderline cases or against smaller businesses who were genuinely unaware of a breach causes a chilling effect for certain activity. 

A widely held view until recently had been that enforcement had not been significant enough, especially given the importance of effective sanctions as a foreign policy tool in the current geopolitical context. With the exception of a £20m fine imposed against Standard Chartered, between 2019 and 2024 OFSI had only imposed fines to the combined value of just over £300,000, and no criminal prosecution was secured for breaches of UK sanctions during the same period. By comparison, in 2024 alone HMRC entered into settlements for breaches of UK export control laws totalling over £5m. 

There have however been a number of recent indications that enforcement of UK sanctions is stepping-up, including:

• The launch of OTSI in October 2024 to regulate many aspects of trade sanctions previously regulated by HMRC, and in particular providing it with the power to impose civil fines on a strict liability basis. 

• The publication on 15 May 2025 of a policy paper following a cross-government review of sanctions implementation and enforcement signalling a need to increase the deterrence effect of enforcement.

• OFSI’s consultation in summer 2025 on improving civil enforcement processes for financial sanctions. This includes a proposal to raise maximum civil penalties for breaches of financial sanctions to the higher of £2m or 100% of the value of the underlying breach. It also includes proposals on simplifying the enforcement process, including a new "settlement" scheme. 

• Recent decisional practice, for example :

  •  OFSI taking six enforcement actions in 2025 (compared to a combined total of 10 actions between 2019 and 2024), including making public disclosures of breaches in cases where they did not issue a fine.

  • HMRC issuing a record penalty of over £1.1m as part of a settlement for breaches of UK sanctions against Russia. 

  • The first successful criminal prosecutions for breaches of UK sanctions laws in April 2025. 

Based on these trends towards greater and more public enforcement, companies operating with a UK nexus may look to prioritise sanctions compliance within their wider compliance programme. Companies with a global sanctions compliance programme may also look to give greater priority to UK sanctions compliance within that. Important steps to consider include:

• Assessing potential exposure to breaches of UK sanctions due to the nature and location of business activities, and tailoring a proportionate compliance programme based on identified risks. There is not a "one-size-fits-all" approach as the actions that should be taken to avoid breaches will depend on what specific parts of UK sanctions legislation risk exposure is highest to. For example, certain companies may not be exposed to breaches of trade sanctions but very exposed to breaches of financial sanctions, whereas others may have specific exposure to provisions on trade in certain services or luxury goods. 

• Determining whether any specific reporting obligations exist due to being a "relevant firm" – these were extended to high-value cash dealers, art market participants, insolvency practitioners and letting agents in May 2025. 

• Investigating whether current customer and supplier due diligence procedures account for sanctions risk and are robust. Performing a simple search against designated persons in the UK Sanctions List may not be sufficient as for example there are restrictions on supplying certain goods and services to any person in or linked to certain jurisdictions. 

• Taking into account potential sanctions risk in contracts, which might include indemnity-backed warranties on the counterparty’s compliance with sanctions, and specific termination rights linked to sanctions issues.