Overview
On May 15, 2025, the UK government published its first formal cross-government review of the implementation and enforcement of UK sanctions (the “Review”). The Review covers the period 2022 - 2023, evaluating how sanctions policy is delivered across the UK government and assessing the operational capability of relevant UK government departments and agencies. The purpose of the Review was to identify further steps that could be taken to improve and facilitate compliance, increase the deterrent effect of sanctions enforcement, and invigorate the tools available across the UK government to take robust enforcement action against those who seek to evade sanctions. The Review identifies a series of key findings that the UK government is committed to implementing during the next year, which offer a roadmap to some of the developments that will impact businesses’ sanctions compliance efforts over the coming months.
Strategic Context
The Review was conducted against the backdrop of the unprecedented expansion of the UK’s sanctions regime in response to Russia’s invasion of Ukraine in February 2022. For example, in 2022 alone the UK designated over 2,000 individuals and entities under the Russia sanctions regime, more than doubling the number of UK designated persons included on OFSI’s Consolidated List of Asset Freeze Targets in the UK. The scale, speed, and complexity of these changes tested the capacity of the UK’s post-Brexit autonomous sanctions framework and underscored the need for a coordinated, well-resourced, and agile enforcement system.
In October 2024, the Minister for Europe launched the Review with the objective of strengthening the UK’s overall sanctions enforcement framework. The Review highlights the importance the UK government ascribes to sanctions as a foreign policy and national security tool to deter and disrupt malign activity, and demonstrate the UK’s values, and is centred on three core themes - compliance, deterrence, and enforcement powers.
The Review builds on recent efforts made through the Economic Deterrence Initiative to strengthen UK sanctions enforcement infrastructure by expanding the role of HM Treasury’s Office of Financial Sanctions Implementation (“OFSI”) and creating new sanctions enforcement capability in the form of the Office of Trade Sanctions Implementation (“OTSI”) and the Joint Maritime Security Centre (“JMSC”).
The Review had three primary aims:
- improve and facilitate sanctions compliance by ensuring UK companies and nationals understand their obligations;
- increase the deterrent effect of enforcement by making the consequences of non-compliance more visible and predictable; and
- strengthen the UK’s sanctions enforcement toolkit by ensuring that enforcement authorities are equipped with the necessary capacity, legal powers, and actionable intelligence to take robust, proportionate action.
Key Findings and Points for Action
The Review identifies ten key findings across three areas and sets out action items that the UK government is committed to implementing in the next year.
1. Compliance
The Review identifies a need to strengthen sanctions compliance support, particularly for smaller businesses and organisations that are less familiar with the obligations imposed by UK sanctions. To address this need, the UK government plans to expand its outreach efforts and develop targeted guidance for currently underserved sectors. It will also undertake a comprehensive update of the sanctions-related resources on the GOV.UK website and restructure existing statutory guidance and online materials to ensure that they are clearer, more modern, and easier to navigate. Additionally, to support more effective sanctions screening by industry, the UK Sanctions List and OFSI’s Consolidated List will be merged into a single, unified sanctions list. Finally, in response to concerns expressed by industry about the complexity of the “ownership and control” test and the level of resources required to apply the test in practice, measures will be introduced to provide greater clarity on this vital issue.
2. Deterrence
To enhance the deterrent effect of the UK sanctions enforcement, the UK government intends to increase transparency in relation to its enforcement activity by publishing: (i) a cross-government sanctions enforcement strategy that sets out the types of non-compliance that may trigger enforcement action and the range of possible enforcement outcomes; and (ii) details of sanctions enforcement actions and disruptions on a regular basis to create more “teachable moments” for industry. To support the faster and more efficient resolution of financial sanctions breaches, the UK government intends to initiate a consultation on an early civil settlement scheme, akin to the compound penalty regime used by HM Revenue and Customs to resolve trade sanctions breaches. A consultation will also be undertaken on a fast-track penalty process for certain financial sanctions breaches, which is intended to deliver swifter and more proportionate enforcement outcomes while allowing finite enforcement resources to be focused on more serious or intentional breaches of the sanctions regime.
3. Toolkit
With respect to the reporting of sanctions breaches, the UK government intends to explore ways to make the reporting of sanctions breaches easier by clarifying sanctions reporting requirements and channels, as well as considering the viability of a single reporting point for suspected UK sanctions breaches. Additionally, whistleblower protections will be strengthened by amending the Public Interest Disclosure (Prescribed Persons) Order 2014 to ensure that government departments with responsibility for financial, transport, and certain trade sanctions are prescribed for the purposes of the protections offered under that regime.
The UK government has also stated its commitment to exploring additional areas for reform, including improved coordination of sanctions-related intelligence, the need for end-use licensing controls for high-risk exports, supporting British Overseas Territories (e.g., the British Virgin Islands and Cayman Islands) to adopt civil enforcement powers, and enhancing transport powers to restrict the movement of targeted aircraft.
Conclusion
The Review proposes a number of potentially significant changes to the way in which the UK sanctions framework is implemented and enforced. As the UK continues to strengthen its sanctions architecture, businesses’ sanctions compliance programmes will be expected to keep pace. Businesses subject to UK sanctions jurisdiction should pay close attention to the progress made by the UK government in implementing the action items identified by the Review over the coming months and carefully consider how any changes that are implemented impact, and should be reflected in, existing sanctions policies, procedures, and controls. For more information on these developments, contact the authors of this post, Alexandra Melia or Elliot Letts, in Steptoe’s Economic Sanctions team in London.
