Policy paper

Cross-government review of sanctions implementation and enforcement

Published 15 May 2025

Introduction

1. Sanctions are a vital foreign policy and national security tool used to deter and disrupt threats and malign behaviour and demonstrate our values. The UK created new powers in the Sanctions and Anti-Money Laundering Act 2018 (SAMLA), giving the government independent powers to impose, implement, enforce and lift sanctions.

2. The UK system has evolved since 2018. In particular, SAMLA has been updated several times to strengthen the sanctions framework, close loopholes and make the system more agile to meet evolving geopolitical challenges.

3. Underpinning our sanctions with strong enforcement is critical to their impact. That means supporting the private sector to understand and comply with sanctions, and robustly tackling failures to comply. We will punish serious breaches with large fines or criminal prosecution. Our investment and improvements are paying off. In March, the Office of Financial Sanctions Implementation (OFSI) imposed a monetary penalty of £465,000 for breaches of Financial Sanctions, and in April the NCA secured the first convictions for breaches of the UK’s Russia sanctions. In addition, HMRC has issued six compound settlements against UK companies that have breached the Russia trade sanctions regulations for a total of £1,363,129, including one in August 2023 for £1 million.

4. In October 2024, the Minister for Europe launched a cross-government review of sanctions enforcement to consider ways to further strengthen the UK’s enforcement model. The review focused on compliance, deterrence and powers and considered how best to harness systemic efficiencies, improve information sharing and minimise the administrative burden of compliance. The review recommended a number of improvements. These build on previous projects delivered through the Economic Deterrence Initiative (EDI) and an exercise to clarify sanctions roles and responsibilities across government^{[footnote 1]}.

5. This review has been led by the Foreign, Commonwealth and Development Office (FCDO) in collaboration with key sanctions Departments and agencies including HM Treasury (HMT), the Department for Business and Trade (DBT), the Department for Transport (DfT), HM Revenue and Customs (HMRC) and the National Crime Agency (NCA). It has been informed by insights from a series of meetings with external sanctions experts, including from industry, academia, think tanks, parliamentarians and international partners.  

Strategic context

6.  The UK deploys sanctions to isolate, restrict or change the behaviour of the actors targeted and to send a wider message. More specifically, we use sanctions to:

• deter malign activity, either aimed at preventing particular action or bringing it to an end
• disrupt malign activity, for example by denying access to resources such as military equipment, sensitive technology or funding
• demonstrate our values, for example to show disapproval or to defend international norms that are under threat

7. Sanctions are often developed in response to real-time events, and in concert with allies, or the wider international community. 

8. We keep our sanctions powers, regimes, designations and measures under review to respond to new developments and changing circumstances.

9. SAMLA provides a transparent and robust system of legal challenge and review, and court judgments have established important legal precedents. Overall, the judgements show we are upholding our approach of ensuring sanctions are well-reasoned, in line with the law and justified in view of their important foreign policy objectives.

10. Increased threats to our security and national interests, including from Russia’s invasion of Ukraine, have necessitated a fast-moving sanctions response. Businesses want simplicity, clarity, and the cost of compliance to be proportionate to the size of their business and their exposure to sanctions risks. We are committed to providing this. We proactively engage with industry to enhance businesses’ understanding of UK sanctions and address specific technical challenges and we provide accessible guidance to support users to understand and implement sanctions. This approach gives businesses confidence and creates a regulatory environment that is conducive to economic growth.

11. Against this backdrop, our sanctions are guided by 5 key principles:

i. Our sanctions have clearly articulated objectives. They are tools that support our foreign, national and security policy objectives. They are designed to protect national security, promote global peace and security, and defend international norms and standards. That includes protecting the sovereignty and territorial integrity of states and promoting human rights.

ii. Our sanctions are part of a wider strategy. They complement and reinforce other levers rather than act in isolation. Sanctions are most effective when they are linked to broader policies that address root causes. They work best when they are considered as part of the sanctions life cycle, including the lifting of measures. We consider other responses – including tools such as law enforcement or diplomatic outreach – before resorting to sanctions. Sanctions are always one element in a complex and dynamic picture.

iii. Our sanctions are proportionate and rigorous. They are carefully designed and targeted, balancing the impact on the intended target and the impact on the UK domestically, such as to our growth objective, as well as wider consequences in the target country and/or other countries. We draw on evidence from multiple sources and we make sure that every sanction complies with our domestic and international legal obligations. We design with implementation and enforcement in mind. We assess sanctions’ effectiveness against a regime’s original objectives, changing circumstances and emerging evidence, adapting our approach and measures as needed.

iv. Our sanctions work best when multiple countries work together. Where possible, we use the global reach of UN sanctions to secure international agreement across all 193 UN Member States, harnessing our position as a permanent Security Council member, and engaging a range of global partners. Where use of UN sanctions is not possible, we coordinate through allied groupings, such as the G7, and with key partners like the US and EU, to send a strong and united signal and increase our practical reach. This does not mean that we will always take identical and simultaneous action. Our preference is to act with others where we can, but where there is a case for the UK to act alone via the use of our autonomous sanctions, we will do so.

v. Our sanctions are designed to avoid and mitigate unintended consequences, within the UK and globally. They recognise the need for sustainable growth, food security, global financial stability, and the stability and security of all countries. That means protecting humanitarian priorities, addressing implications for businesses and for the UK and global economy, and enabling specified legitimate activity. For example, the humanitarian exception under our UN regimes ensures that supplies of food or medicine can reach vulnerable countries.

12. Funding provided through the EDI has supported efforts to enhance sanctions capacity and capability including through improved powers, capability and capacity to undertake monitoring and detection of sanctions breaches, support to the Overseas Territories to implement and enforce UK sanctions and enhanced capacity to manage litigation risks.

13. In October 2024 we used EDI funding to introduce new sanctions enforcement powers for DBT and DfT, including the power to impose civil monetary penalties for breaches of the UK’s aircraft, shipping and certain trade sanctions. These powers also introduce new reporting requirements for suspected breaches and give us the option to ‘name and shame’ sanctions offenders. They underpinned the launch of the Office of Trade Sanctions Implementation (OTSI).

14. Other key developments supported by the EDI include: reinforcing OFSI and the Joint Maritime Security Centre (JMSC), enabling them to build on their capabilities to tackle financial and transport sanctions evasion; mitigating legal risk by investing in legislation drafting and litigation skills; building new tools to improve the identification and targeting of the Russian shadow-fleet; a step change in our understanding of goods at the greatest risk of circumvention and the routes they follow; and expanding the cross-Government sanctions capability, including to the Department for Science, Innovation and Technology to support policy development on technology controls. 

Review conclusions and actions

15. Within this strategic context, the aims of the review were to identify further steps to:  

• improve and facilitate compliance: ensuring that UK nationals and companies within the UK understand which sanctions are in place and how to comply
• increase the deterrent effect of enforcement: underscoring the impacts of non-compliance
• invigorate the cross-Government toolkit: ensuring access to the right capabilities, capacity, powers, and actionable intelligence to take robust enforcement action against those who seek to evade sanctions

16. To give sanctions bite, there must be clear consequences for offenders. That means equipping enforcement authorities with a range of enforcement tools, enabling them to take proportionate and robust action in response to breaches.  It also means supporting industry to maximise compliance.

17. Effective enforcement involves a balance between civil penalties, criminal prosecutions and other disruptions. Where compliance or deterrence is effective, or where sanctions have effectively disrupted activity, there may be fewer enforcement actions. Criminal prosecution will not always be the optimal approach, and in some cases civil enforcement can be equally effective in terms of achieving future compliance and deterrence. That is why it is important to have a broad and effective enforcement toolkit of civil and criminal powers.

18. The conclusions of the review have been categorised into areas that we are committed to implementing in financial year 2025 to 2026 and those that require longer-term assessment of the costs, risks, benefits and likely impact. From more user-friendly guidance to a new enforcement strategy, joining up more effectively on intelligence including exploring a joint intelligence function and quicker and more impactful penalties, these actions will make our sanctions easier to comply with, increase the deterrent effect of enforcement and ensure we have the right capabilities, capacity and powers to take robust action against those who deliberately evade UK sanctions.

19. We have made an immediate start. In March we launched a new UK sanctions alert service, bringing together notifications from the FCDO, OFSI and OTSI – the key business-facing parts of the government’s sanctions system – for the first time. The service provides subscribers with updates that cover designations packages, legislative amendments, licences and other relevant topics. These notifications will improve transparency and support compliance with UK sanctions. In April, we introduced Director Disqualifications Sanctions to close a loophole whereby a Designated Person could hold a director role in the UK.

20. The following is a summary of the review conclusions we are committing to implement in financial year 2025 to 2026:

Compliance

i. Targeted guidance and enhanced outreach

Engagement sessions with a range of sanctions professionals and industry experts highlighted variable levels of sanctions awareness within different sectors, with smaller businesses less able to access specialist advice. There was a strong appetite for enhanced outreach.

Action: Create additional guidance for, and increase engagement with, sectors less familiar with sanctions compliance.

ii. Clearer and more accessible guidance

Feedback identified that government guidance should be better organised, modern and more easily searchable.

Action: Deliver a comprehensive update to sanctions pages and statutory guidance on GOV.UK to make it clearer and better structured.

iii. Single sanctions list

UK designations are currently detailed in two lists, the UK Sanctions List and HM Treasury’s Consolidated List of asset freeze targets. A single list will aid industry in screening for designated persons, especially those with non-financial designations.

Action: Consolidate the UK Sanctions List and the Consolidated List of asset freeze targets into a single sanctions list for all UK designations.

iv. Ownership and control

Industry highlighted the challenges that ownership and control obligations pose to effective sanctions compliance, involving complex due diligence and legal costs.

Action: Deliver measures to provide further clarity on ownership and control.

Deterrence

v. Publication of enforcement information

Easily accessible and consolidated enforcement information helps industry to learn from remedial action.

Action: Regular publication of sanctions enforcement action and disruptions to take advantage of “teachable moments”.

vi. Sanctions enforcement strategy

A cross-government strategy on enforcement will assist industry to understand the range of non-compliance and possible enforcement consequences.

Action: Publish a government-wide sanctions enforcement strategy.

vii. Penalty settlement system

Beyond HMRC’s compound penalties, the UK does not have powers to agree early settlements for sanctions cases. Quicker resolution of civil financial sanctions cases will aid deterrence and ensure that enforcement action is delivered more efficiently and does not impose undue burdens on UK firms.

Action: Develop an early civil settlement scheme for breaches of financial sanctions for public consultation.

viii. Fast-track penalties

Swifter penalties for certain types of financial sanctions offences will deliver more efficient and proportionate enforcement outcomes and drive compliance with reporting and licensing requirements. It will also free up resources to focus on the most complex, serious and deliberate breaches of sanctions and reduce the administrative burden on industry.

Action: Develop an accelerated civil penalty process for certain financial sanctions breaches for public consultation.

Toolkit

ix. Making it easier to report suspected breaches

Multiple reporting points for different breaches may be confusing and could result in fewer reports being made or misdirected information.

Action: Explore ways to clarify reporting requirements and channels, including the viability of a single reporting point for suspected sanctions breaches.

x. Whistle-blower protections

Ensuring that workers who disclose prescribed information relating to breaches of financial, transport, and certain trade sanctions to the relevant government departments can qualify for whistleblowing protections may increase the number of disclosures made to government, supporting sanctions implementation and enforcement. To qualify for protection, a worker would usually need to make a disclosure to an employer, a legal advisor or a ‘prescribed person’ under the Public Interest Disclosure (Prescribed Persons) Order 2014 (which includes HMRC for customs and border-related functions).

Action: Update the Public Interest Disclosure (Prescribed Persons) Order 2014 to prescribe relevant government departments in relation to financial, transport and certain trade sanctions.

21. The Government is committed to exploring a number of other areas to go further and deeper to improve sanctions enforcement, implementation depending on resourcing and emerging priorities. These include:

• exploring options for more effective join up on intelligence, including the merits of a new joint sanctions intelligence function
• considering introduction of sanctions end-use licensing controls for exports with high risk of sanctions diversion
• supporting interested Overseas Territories to implement civil enforcement powers
• enhancing transport powers to restrict the movement of targeted aircraft

22. Taken together, these steps will improve and facilitate compliance, increase the deterrent effect of enforcement, and invigorate our enforcement toolkit. Elements of this will be funded by the EDI, in line with its ongoing focus on supporting improvements in sanctions enforcement.

Annex 1: Roles and responsibilities across government

The Foreign, Commonwealth & Development Office is responsible for overall foreign policy, including definition of high-level policy objectives, sanctions regime design and strategy ^{[footnote 2]}.

	Trade sanctions	Financial sanctions	Transport sanctions	Immigration sanctions
Measures policy: design of sanctions measures within regimes	Department for Business and Trade Foreign, Commonwealth & Development Office	HM Treasury Foreign, Commonwealth & Development Office	Department for Transport Foreign, Commonwealth & Development Office	Home Office Foreign, Commonwealth & Development Office
Designations: decisions to apply certain sanctions measures to specific individuals, entities and ships	Foreign, Commonwealth & Development Office	Foreign, Commonwealth & Development Office	Foreign, Commonwealth & Development Office	Foreign, Commonwealth & Development Office
Implementation: licensing, engagement and guidance	Department for Business and Trade’s Office of Trade Sanctions Implementation	HM Treasury’s Office of Financial Sanctions Implementation	Department for Transport	Home Office
Civil enforcement: investigations and civil monetary penalties	Department for Business and Trade’s Office of Trade Sanctions Implementation	HM Treasury’s Office of Financial Sanctions Implementation	Department for Transport	Home Office
Criminal enforcement: investigations and criminal prosecutions	HM Revenue and Customs Police and Serious Fraud Office	National Crime Agency Police and Serious Fraud Office	National Crime Agency Police and Serious Fraud Office	Home Office Police and Serious Fraud Office

Annex 2: External engagement summary

The Foreign Commonwealth and Development Office (FCDO), with support from other government departments, conducted a series of strategic engagements sessions with a range of sanctions professionals and experts. This included engagement across industry, including with trade associations, legal professionals, and representatives from the maritime sector, financial sector and a variety of manufacturing and technology companies exposed to trade sanctions. The FCDO also met experts from think tanks and academia, parliamentarians and representatives of partner governments.

This targeted engagement complemented the UK Government’s regular discussions with stakeholders to provide a set of reflections to inform the review. We will continue to engage broadly on sanctions whilst implementing the review conclusions and to build partnerships to strengthen the enforcement of UK sanctions.

Main themes

Recognition that different sectors are at different levels of maturity with sanctions, and that government communications and engagement should reflect that. The creation of the Office for Trade Sanctions Implementation had been positively received. There were concerns from those sectors investing in sanctions compliance that other areas of industry were less aware of their sanctions obligations, thereby displacing risk onto them.

There is a premium on direct engagement between government and industry, it has the highest impact when it comes to increased compliance. Areas with the greatest potential for increased compliance are the industrial and trade sectors least aware of their obligations due to the novel measures in the Russia sanctions regulations. These industries would benefit from more direct engagement with government, including through trade associations. Ideas included an increased government presence at conferences and events, including outside London.

The UK Government sanctions brand should be consolidated and the digital footprint developed to improve the accessibility of sanctions guidance and notifications. Guidance should be better organised, modern, and searchable, with read across clearly sign posted. Consolidating actions into a single sanctions list would aid industry in screening for designated persons, especially those targeted with non-financial designations. A unified sanctions alert system would ensure that industries do not miss vital notifications needed for compliance. Significant benefits cited for a single reporting point for suspected sanctions breaches.

Scope to improve guidance, bridging gaps in unclear regulations and providing more tailored support for industries who don’t have specialised compliance advice. Stakeholders welcomed the new ‘thematic’ style guidance and FAQs, and there is appetite for them to be extended significantly. They could add particular value in areas where different pieces of legislation must be read together to be understood. This would be significant for those industries who are too small to pay for in-house or specialist compliance advice. Targeted guidance would be welcome.

Improvements to the ownership and control model to aid compliance and reduce risks of competitive disadvantage to UK industry. It was recognised that ownership and control models are key to ensuring that UK sanctions are effective and that they cannot be easily circumvented. Stakeholders were particularly concerned about making control determinations, and the perception that those with the highest risk appetites (often outside the UK) were gaining an unfair advantage. There is extensive appetite for further guidance, including publishing negative determinations; creating reporting obligations; and considering an aggregation model. Alignment with international partners on ownership would be welcomed, especially where the UK had a lower threshold.

Publicise enforcement action, underpinned by a well understood cross-government enforcement strategy to target the most severe penalties to the most significant breaches, maximising the deterrent effect. Stakeholders called for a better understanding of government’s approach to enforcement and for more publicly available information. Calls included publishing the name of the company facing action, although the highest premium was placed on explaining why the action had taken place and what remedial actions the company had been forced to take so industry can learn from it. Calls for a cross-government strategy included references to OFAC’s ‘enforcement framework’ that included example case studies of a range of breaches and the type of enforcement action that would result.

Greater clarity on how sanctions action delivers the foreign policy purposes and the direction of desired behaviour change. Appetite for seeing a ‘theory of change’ between sanctions requirements and foreign policy facts on the ground. Call for greater public visibility of decisions to vary or revoke sanctions due to foreign policy or behavioural changes.

Join up across government departments, maximising the intelligence and analysis from different elements of the system. The published table on sanctions roles and responsibilities across government was welcomed, and there was appetite for more detail, including on which part of the system to engage with in a variety of scenarios. Feedback included ensuring that intelligence and analysis was shared and utilised across departments.

Recognition of investment in resource and expertise but noted that retention of staff and long-term relationships were paramount. The government was commended for investing in sanctions resourcing with calls for retention of deep expertise to be prioritised as well as deepening understanding of the industry perspective. Opportunities to learn from private sector could include reciprocal secondments and recruitment from the private sector.

Opportunities to collaborate with the private sector throughout the sanctions policy cycle. Strong support from industry and academic stakeholders for increased collaboration between government and industry. Specific recommendations included learning from the ‘Joint Money Laundering Intelligence Taskforce’ and to consider how to further draw on external expertise in the legal, maritime, and manufacturing sectors.

Government to consider how it shares information externally, making the most of established or new information sharing fora. A coalition of stakeholders are keen to explore earlier information sharing about sanctions action, particularly with key financial institutions. This could draw on the practice of international partners and could have significant benefits in reducing the risk of asset flight and the administrative burden of compliance.

Opportunity for new or reinforced avenues for reporting welcomed, although stakeholders unsure over worth of incentive schemes. The US has a track record of incentive schemes for whistleblowers, where reports that successfully lead to convictions or fines would lead to a financial reward. Stakeholders reflected that the UK did not have the same precedent for such schemes, and there was the potential for government to be flooded by ‘low grade’ reports which detracted from more effective enforcement. However, some stakeholders commended additional avenues to report into Government and called for government to encourage more, or better quality, reporting based on analysis of the benefits.

Look to remove or ameliorate impediments to prosecutions and explore additional obligations on ‘enablers’ who protect designated individuals. The UK was seen as out of step with international partners due to its requirement that the prosecution is liable to pay defence costs if the prosecution does not go ahead, or the defendant is found not guilty. More focus was urged on the ‘professional services enablers’ who were responsible for building dense circumvention structures to obscure the finances of designated persons, including the use of targeted disclosure or reporting obligations.

Creative and bold ideas for reducing administrative burden would be welcomed from a broad array of stakeholders, with hope that resource could be reinvested into more complex compliance. Stakeholders acknowledged that some of the best ways to improve compliance would be resource heavy for government, including offering service desks. Changes in approach to implementation, such as a significant increase in general licence use, changes to the ownership and control model, or pivoting to a record keeping requirement with a de minimis threshold for first time breaches, would allow compliance professionals to refocus resource away from administrative process onto tackling more complex compliance issues.

1. See Annex 1. ↩

2. There are a range of other departments that provide sector-specific advice on sanctions to inform policy, implementation and enforcement, including but not limited to: the Export Control Joint Unit, Department for Digital, Culture, Media and Sport, Department for Energy, Security and Net Zero, Department for Environment, Food and Rural Affairs, Department for Science, Innovation and Technology, Ministry of Defence and Ministry of Justice. HM Treasury lead on designations under the UK’s domestic counter-terrorism sanctions regime. The Office of Trade Sanctions Implementation (OTSI) is responsible for civil enforcement for non-customs related trade sanctions. HM Revenue and Customs (HMRC) maintains enforcement ownership for trade sanction offences that fall within its remit as the UK Customs Authority. ↩