Guidance

Financial sanctions enforcement and monetary penalties guidance

Updated 9 February 2026

1. Overview

1.1. Monetary penalties for financial sanctions breaches

The Policing and Crime Act 2017 (the ‘2017 Act’) contains powers for HM Treasury to impose monetary penalties for breaches of financial sanctions.

The Sanctions and Anti-Money Laundering Act (2018) (‘SAMLA’) amended the 2017 Act. Those amendments ensured the majority of provisions in regulations made under SAMLA fall within the 2017 Act definition of ‘Financial sanctions legislation’, which in turn ensures that where there has been a breach of those provisions a monetary penalty under the 2017 Act can be applied.

The Office of Financial Sanctions Implementation (OFSI) is the part of the Treasury that applies these powers. This guidance sets out what the powers are, how OFSI will use them, and a person’s rights if OFSI imposes a monetary penalty on them.

We have issued this guidance in line with section 149 (1) of the 2017 Act, which states:

The Treasury must issue guidance as to:

• The circumstances in which it may consider it appropriate to impose a monetary penalty under section 146 or 148.

• How it will determine the amount of the penalty.

In this guidance OFSI sets out:

• an explanation of the powers given to the Treasury in the 2017 Act
• a summary of our compliance and enforcement approach
• an overview of how we will assess whether to apply a monetary penalty, and what we will take into account
• an overview of the process that will decide the level of monetary penalty
• an explanation of how we will impose a monetary penalty, including timescales at each stage and rights of review and appeal.

OFSI will periodically review this guidance in response to feedback and as we learn from using these powers.

Consultation to improve OFSI’s civil enforcement processes

Between July and October 2025, OFSI consulted on measures to enhance the effectiveness of its civil enforcement processes. Feedback from this consultation has informed a strengthened enforcement framework. On 9 February 2026, OFSI updated this guidance to reflect these enhancements, along with additional edits made to improve procedural clarity throughout. You should read this revised guidance in full before relying on it. The below is a summary of key changes:

• Chapter 4 - Early Account Scheme (EAS). A new section has been added introducing the EAS, which enables subjects to provide an early factual account of a case for up to a 20% monetary penalty reduction, including details on eligibility, procedural requirements and the information OFSI expects to receive as part of the early account.

• Chapter 5 – Case Assessment. The case assessment framework has been revised to provide a clearer classification of breaches through a four‑level seriousness model. Several case factors have been added, amended, renamed or removed. This includes the introduction of the new ‘strategic priority of the regime’ case factor, updates to the intention, knowledge and reasonable cause to suspect and circumvention factors, and renaming the ‘knowledge of sanctions’ factor to ‘knowledge and management of financial sanctions risk’. Professional facilitation, failure to apply for a licence and failure to respond to an information request have been removed as case factors.

• Chapter 6 – Monetary Penalty Process and Settlement Scheme. The methodology for calculating monetary penalties has been updated to incorporate the new voluntary disclosure and co-operation discount (up to 30%), the Settlement Scheme discount (20%), and the EAS discount (up to 20%). Significant additional detail has been included clarifying what OFSI considers to be complete voluntary disclosure and co-operation. A new section introduces the Settlement Scheme, explaining how it operates, the discount available, and how it applies to transitional cases.

• Chapter 7 – Financial Hardship. A new policy has been added explaining how OFSI will consider claims of financial hardship in exceptional circumstances. The guidance sets out that the burden of demonstrating financial hardship lies with the subject, and that OFSI may consider whether a reduction would be contrary to the public interest.

• Chapter 13 – Fixed Monetary Penalties. A new section sets out how the £5,000 and £10,000 fixed monetary penalties for information, reporting and licensing offences will be implemented. This includes a table of case assessments, detail on determining penalty amounts, and examples illustrating conduct likely to result in either penalty level. An expanded explanation of information offences has also been added.

1.2. Monetary penalties for breaches under the Russia and Belarus Regulations

Regulation 88C of The Russia (Sanctions) (EU Exit) Regulations 2019 (the ‘Russia regulations’) and regulation 56C of The Republic of Belarus (Sanctions) (EU Exit) Regulations 2019 (the ‘Belarus regulations’) contain powers for HM Treasury to impose monetary penalties for breaches of the designated person (DP) asset reporting requirement (see 5.11 of OFSI’s General Guidance).

Regulation 88C of the Russia regulations contains powers for HM Treasury to impose monetary penalties for breaches of the land prohibitions and the prohibitions on maritime services related to Russian oil in those regulations.

OFSI is the part of HM Treasury that applies these powers. More guidance on what the powers are, how OFSI will use them, and a person’s rights if OFSI imposes a monetary penalty on them can be found in the Russia Guidance and the Oil Price Cap Guidance. The substance of the additional guidance in the Russia Guidance, adjusted as appropriate, also applies to the Belarus DP asset reporting requirement.

This guidance on OFSI enforcement applies to financial sanctions and all other sanctions types as mentioned above.

2. Introduction

This chapter sets out some basic information about financial sanctions, the power to impose monetary penalties, and to whom the power can apply.

2.1. What are financial sanctions?

Financial sanctions are an important part of foreign policy, and they also support national security. They help to maintain the integrity of and confidence in the UK financial system. Generally, they are imposed in order to:

• coerce a target into changing their behaviour (or aspects of it) by increasing the cost on them to such an extent that they decide to cease the unacceptable behaviour
• constrain a target by trying to deny them access to key resources needed to continue their offending behaviour, including the financing of terrorism or nuclear proliferation
• signal disapproval of a target as a way of stigmatising and potentially isolating them, or as a way of sending broader political messages to international or domestic constituencies
• protect the value of assets that have been misappropriated from a country until these assets can be repatriated.

The most common types of financial sanctions currently in use or used in recent years include:

• targeted asset freezes, which are usually applied to named individuals, entities and bodies, restricting their access to and ability to use funds and economic resources
• restrictions on a wide variety of financial markets and services. These can apply to named individuals, entities and bodies, to specified groups or to entire sectors. To date they have taken the form of investment bans, restrictions on access to capital markets, directions to cease banking relationships and activities, requirements to notify or seek authorisation before certain payments are made or received, and restrictions on provision of financial, insurance, brokering, advisory services or other financial assistance
• directions to cease all business of a specified type with a specific person, group, sector territory or country.

Asset freezes and some financial services restrictions will apply to entities (meaning a body of persons corporate or unincorporate or any organisation or association, or combination of persons) that are owned or controlled, directly or indirectly, by a designated person.

Guidance on financial sanctions is available on the OFSI GOV.UK page.

References to a ‘person’ throughout this guidance can be a reference to natural persons, as well as a legal person, body or entity. References to a ‘designated person’ (DP) are to persons who are subject to financial sanctions, and references to the ‘listing’ of a person means their inclusion on the lists of designated persons.

If a person or entity is designated, their name will be recorded on the UK Sanctions List.

2.2. Powers given to HM Treasury to impose penalties for financial sanctions breaches

A breach of financial sanctions may be a criminal offence, punishable upon conviction by up to 7 years in prison. There are both civil and criminal enforcement options to respond to breaches of financial sanctions.

Law enforcement agencies may consider prosecution for breaches of financial sanctions. The monetary penalties regime created by the 2017 Act provides an alternative to criminal prosecution for breaches of financial sanctions legislation. OFSI is the part of HM Treasury that imposes these monetary penalties.

The power to impose a monetary penalty, and the limits on the amount of monetary penalty, are created by section 146 of the 2017 Act:

Section 146. Power to impose monetary penalties

1. The Treasury may impose a monetary penalty on a person if it is satisfied, on the balance of probabilities, that:
   (a) the person has breached a prohibition, or failed to comply with an obligation, that is imposed by or under financial sanctions legislation.
   1A. In determining for the purposes of subsection (1) whether a person has breached a prohibition, or failed to comply with an obligation, imposed by or under financial sanctions legislation, any requirement imposed by or under that legislation for the person to have known, suspected or believed any matter is to be ignored.

2. The amount of the penalty is to be such amount as the Treasury may determine but it may not exceed the permitted maximum.

3. In a case where the breach or failure relates to particular funds or economic resources and it is possible to estimate the value of the funds or economic resources, the permitted maximum is the greater of:
   (a) £1,000,000, and
   (b) 50% of the estimated value of the funds or resources.

4. In any other case, the permitted maximum is £1,000,000.

On 15 March 2022 the Economic Crime (Transparency and Enforcement) Act 2022 amended the powers in the 2017 Act, omitting original subsection (1)(b) and adding subsection (1A) above. This removed the requirement for OFSI to demonstrate that a person had knowledge or reasonable cause to suspect they were in breach of a financial sanction to issue a monetary penalty. This amendment applies to consideration of civil liability and the imposition of a monetary penalty and is not relevant to any assessment of whether a criminal offence has been committed under sanctions regulations.

The 2017 Act previously increased the maximum sentence for criminal prosecutions from 2 to 7 years’ imprisonment and brings financial sanctions into the scope of Deferred Prosecution Agreements and Serious Crime Prevention Orders. These changes are not discussed in this document.

The following link provides a version of the Act.

Legislation can be regularly amended, and this link may not display the most up-to-date version. Individuals and companies should always make sure they are consulting the most up-to-date source.

All financial sanctions breaches come within the scope of OFSI’s powers to impose monetary penalties, if they meet the criteria described in this guidance.

2.3. What does ‘breached a prohibition’ or ‘failed to comply with an obligation’ mean?

Please read our general guidance for a more detailed explanation. The summary below should not be relied upon in isolation.

Financial sanctions regulations will contain prohibitions on carrying out certain activities or behaving in a certain way where financial sanctions apply. What is prohibited depends on the exact terms of the relevant financial sanctions regulation.

Individuals and companies should always refer to the up-to-date version of sanctions regulations imposing the specific financial sanctions that apply in their case to understand exactly what is prohibited. OFSI interprets the prohibitions in sanctions regulations widely, as do courts.

If the financial sanction takes the form of an asset freeze, it is generally prohibited to:

• deal with the funds or economic resources belonging to or owned, held or controlled by a designated person
• make funds or economic resources available, directly or indirectly, to, or for the benefit of, a designated person or to a person who is owned or controlled directly or indirectly by the designated person
• engage in actions that directly or indirectly circumvent the financial sanctions.

Financial sanctions also contain reporting obligations which apply to relevant firms, as defined in financial sanctions regulations. For example, relevant firms are required to notify HM Treasury if they have dealings with a designated person, hold frozen assets or if they suspect that a person has breached a prohibition or failed to comply with an obligation under specified provisions of sanctions regulations. Failure to comply with reporting obligations is an offence. Further information on the reporting obligations applicable to relevant firms can be found in Chapter 5 of OFSI’s general guidance.

When OFSI has licensed an activity, the licence may be subject to conditions and reporting requirements. It is an offence not to abide by them or not to take any actions that the licence requires. The licence does not authorise any activity incompatible with its permissions or conditions.

In the regulations the prohibitions will specify that a prohibition is breached where the person knew or had reasonable cause to suspect that they were in breach of the relevant prohibition. However, as outlined above, the removal of subsection (1)(b) in section 146 of the 2017 Act means this is not required for OFSI to impose a monetary penalty.

OFSI also has powers to request information under sanctions regulations. Depending on the regulations concerned, these may include powers to request information in order to establish the extent of funds and economic resources owned, held or controlled by or on behalf of a designated person; to monitor compliance or detect evasion; or to obtain evidence of the commission of an offence. It is an offence not to comply with a requirement to provide information to an OFSI request for information.

2.4. On whom may a monetary penalty be imposed?

A monetary penalty may be imposed on a ‘person’, which is used throughout this guidance to include reference to natural persons, as well as a legal person, body or entity.

In addition, section 148(1) of the 2017 Act says:

If a monetary penalty is payable under section 146 by a body, the Treasury may also impose a monetary penalty on an officer of the body if it is satisfied, on the balance of probabilities, that the breach or failure in respect of which the monetary penalty is payable by the body-

(a) took place with the consent or connivance of the officer, or
(b) was attributable to any neglect on the part of the officer

This means separate penalties could be imposed on a legal entity and the officers who run it. If so, OFSI will consider the imposition and level of monetary penalty on an officer of a body separately from that of the corporate body. An officer on whom a monetary penalty is imposed will have separate appeal rights to the relevant corporate body under sections 147 and 148(3) of the 2017 Act.

Section 148(2) sets out who may be considered an ‘officer’ in this context.

‘Officer of a body’ means-
(a) in relation to a body corporate, a director, manager, secretary or other similar officer of the body or a person purporting to act in any such capacity
(b) in relation to a partnership, a partner or a person purporting to act as a partner
(c) in relation to an unincorporated body other than a partnership, a person who is concerned in the management or control of the body or purports to act in the capacity of a person so concerned.

It is also possible for OFSI to impose a monetary penalty on one person involved in a case and for another to be prosecuted criminally.

3. Our enforcement approach

How OFSI assesses breaches, when deciding whether to impose a monetary penalty, is informed by our overall approach to financial sanctions compliance. This approach covers the whole lifecycle of compliance. That means we take a holistic approach to ensuring compliance with the regime, rather than simply waiting until the law is broken and responding to the breach.

Our approach is summarised by our compliance and enforcement model: promote, enable, respond, change.

We will promote:

• compliance, publicising financial sanctions and engaging with the private sector
• an effective compliance approach promotes compliance by reaching the right audiences, through multiple channels, with messages they can understand and respond to.

We will enable:

• compliance by making it easier to comply, and providing guidance and alerts to help individuals and companies fulfil their own compliance responsibilities
• an effective compliance approach enables cost-effective compliance, makes it easy to comply and minimises by design the opportunities for non-compliance.

We will respond:

• to non-compliance by intervening to disrupt attempted breaches and by tackling breaches effectively
• to non-compliance consistently, proportionately, and transparently, taking into account the full facts of the case, and learns from experience to continuously improve our response.

We do this to change:

• behaviour, directly preventing future non-compliance by the individual and more widely through the impact of compliance and enforcement action.

Having an overall strategic approach helps us design our operational policies and processes in a consistent way. It also enables us to test how well they meet our strategic objectives.

This approach informs how we assess cases and decide monetary penalties (respond), ensuring that our processes maintain the credibility of financial sanctions by enforcing them proportionately and effectively. It also informs how we will publish details of breaches or monetary penalties we impose (promote). Doing so deters future non-compliance from the penalised individual. It also enables others to learn from the case and shows we will act robustly against serious breaches (change).

We have designed our case assessment and monetary penalty decision processes in this context. Operating them effectively means we provide a professional service for the private sector and help ensure that financial sanctions are properly understood, implemented and enforced. Chapters 5, 6 and 7 give guidance on these processes.

4. The Early Account Scheme (EAS)

This chapter explains how OFSI’s Early Account Scheme (EAS) operates and who is eligible to participate in the scheme. It is intended for subjects under investigation, their advisors, and compliance professionals to understand the process, benefits, and requirements of participating in the EAS.

4.1. Overview of the EAS

The purpose of the EAS is to expedite an investigation in appropriate cases. Where OFSI agrees to the use of the EAS, the subject will provide OFSI, within an agreed timeframe, with a comprehensive factual early account of the circumstances of the potential breaches, supported by all relevant materials and evidence.

Participation in EAS does not mean that enforcement action will necessarily follow. OFSI will review the early account and may decide to:

• take no further action and close the case
• issue a private warning
• publicly disclose the breach
• impose a monetary penalty
• continue with further investigative steps.

In the event that OFSI decides to impose a monetary penalty following the production of an early account, the subject may be eligible for a discount of up to 20%, depending on whether the early account was complete, accurate and submitted on time or whether OFSI needed to undertake significant additional investigation work.

The EAS is distinct from OFSI’s Settlement Scheme, and a subject will remain eligible for the EAS discount if they contest the penalty under the statutory process rather than agree to settle the matter.

4.2. Who can access the EAS

The EAS may be used at OFSI’s sole discretion, which will be exercised in accordance with the criteria set out in section 4.4 below, in investigations of legal persons (entities). Natural persons (individuals) will not be able to access the EAS given their inability to carry out an investigation with sufficient independence.

OFSI may make access to the EAS conditional on the appointment of a third party to conduct the investigation and prepare the early account. For example, it may be appropriate to do this where a company is unable to demonstrate to OFSI that they have sufficient internal expertise (e.g. in conducting internal investigations, or with sanctions or financial crime experience) to investigate and create an account with sufficient separation from the persons involved in the breach.

4.3. Requesting access to the EAS

OFSI will not proactively invite a subject to provide an early account, and the subject must instead request it.

OFSI will usually notify the subject that it is under investigation (unless OFSI considers that doing so would likely result in the investigation being frustrated). This notice will include information about the EAS and invite the subject to inform OFSI within 15 business days if they wish to provide an early account. In exceptional circumstances, an extension may be granted but requests to access the EAS made after significant investigative progress has been made by OFSI (for example, after a substantive request for information has been issued) are unlikely to be granted.

4.4. Factors OFSI considers when deciding EAS suitability

In deciding whether to allow access to the EAS, OFSI will consider:

• the potential complexity and scope of the investigation
• the degree to which OFSI already holds relevant evidence or requires additional information to assess the case.

OFSI will also consider the level of confidence it has in the subject’s ability to provide a truthful, comprehensive account. Although the presence of the following factors will not automatically preclude entry to the EAS, OFSI will consider the impact they may have on the level of trust it can place in an early account or whether the factors could be mitigated by imposing conditions on how the subject is to produce the early account (such as access to the EAS being conditional on the appointment of an independent third party to undertake the investigation):

• seriousness or nature of the suspected breaches (including whether the breaches were assessed to be committed intentionally or knowingly)
• whether the subject is or has previously been suspected of circumventing financial sanctions, or whether the suspected breach is of the circumvention offence
• whether a penalty has been imposed or settlement has been reached with the subject previously
• whether any relevant adverse findings have been made against the subject (i.e., finding of dishonesty) by any enforcement or supervisory body
• the existence of linked investigations by any other official body, including supervisory and criminal authorities.

Although not a pre-requisite, OFSI will likely view voluntary self-disclosure as a positive indication of the extent to which a subject can be relied upon to produce a full and complete account. OFSI is unlikely to allow access to the EAS where is it investigating a subject that knowingly failed to report suspected breaches to OFSI.

Where regulated entities are concerned, OFSI may engage with the relevant supervisory body before coming to a decision.

4.5. Agreeing the terms of the Early Account

If OFSI agrees in principle that the subject may use the EAS, the specific terms of the early account will be discussed and agreed between OFSI and the subject and recorded in a letter from OFSI (‘EAS letter’).  The EAS letter will include:

• The initial scope of the early account, for example which suspected breaches will be covered, the relevant period of the account and the events leading up to the suspected breaches, noting that the scope will be kept under review in light of new information or further developments. Supporting documents must be provided with the early account, for example a chronology of events, legal entity and personnel structure charts and organograms, contemporary policies and processes, internal communications relating to the suspected breaches, and a detailed account of the methodology used by the subject in producing the account.
• A delivery date by which the early account is to be provided to OFSI, which will usually be no longer than six months from the date that the terms of the early account are agreed (the period could be longer than six months if an investigation was exceptionally complex).
• A plan for regular (e.g., monthly) review meetings to monitor progress of the internal investigation and the preparation of the early account, and any change to the scope of the early account.
• Where further suspected breaches are identified in the course of preparing the early account, when and how these are to be reported to OFSI (e.g., either immediately upon discovery or at the periodic review meetings).
• Whether as a condition of the early account the subject is to instruct an external party to perform work required to compile the early account. This may be the case where the subject is unable to demonstrate to OFSI that they have sufficient internal expertise (e.g., in conducting internal investigations, or with sanctions or financial crime experience) to investigate and create an account with sufficient separation from the persons involved in the breach. OFSI would not consider it appropriate for persons directly involved in the breach to be conducting the internal investigation. Appropriate third-party firms may include law firms, financial crime consultancies, or other persons where sufficient expertise can be demonstrated. OFSI would require that a person at the relevant third-party firm provides an attestation that they were able to produce an account free of interference and with sufficient access to relevant persons and information.
• The identity of the senior person within the subject who shall provide an attestation alongside the early account, confirming that it is a fair and full account of the circumstances of the case, and that it has been prepared in accordance with the agreed scope. A suitable senior person within a large, regulated firm may be, for example, a Head of Financial Crime, General Counsel, or a Money Laundering Reporting Officer. Within smaller firms, OFSI would request the firm propose an individual and indicate why they deem them to be an appropriate person.
• The terms of the early account must be agreed within 20 business days of OFSI communicating its agreement in principle that the subject may use the EAS.

4.6. During the Early Account process

The subject must:

• undertake an internal investigation in line with the agreed scope
• provide all relevant supporting documents
• participate in regular progress review meetings with OFSI
• notify OFSI of any additional breaches discovered.

OFSI’s deadlines may be extended only if the subject demonstrates genuine progress and unforeseen complexity.

At any point, OFSI may terminate the subject’s access to the EAS if it has concerns about the scope, truthfulness or intention by the subject to complete a full and honest early account. The subject may also seek to terminate participation in the EAS at any stage.

4.7. OFSI’s assessment of the Early Account

Upon receipt, OFSI will review:

• whether the early account is full, accurate and supported by evidence
• whether it identifies breaches, explains the circumstances and addresses OFSI’s enforcement case factors.

Provided the early account is in line with the agreed scope, and contains sufficient detail and supporting evidence, OFSI will then undertake a full assessment of the early account, and other material held, and decide on the intended case outcome, which could be:

• no breach – case closed
• no finding – case closed without conclusion
• private warning
• public disclosure
• monetary penalty
• referral to law enforcement
• further investigation.

Should the early account be not in line with the agreed scope, of insufficient detail or incomplete, OFSI may require additional work to be undertaken, or further material provided before the early account is accepted as complete.

OFSI will always inform a person using the EAS of the outcome of their case. If OFSI intends to impose a monetary penalty, OFSI will assess the level of EAS discount and communicate this to the subject via a notice of intention to impose a penalty.

5. Case assessment

This chapter gives a summary of how OFSI assesses suspected or actual breaches of financial sanctions.

From time to time, we will review our case assessment process and may change it based on our experience. Where we make substantive amendments to our approach, we will publicise that we have done so. OFSI will as a matter of policy assess all breaches of financial sanctions in line with the enforcement guidance in effect at the time of making its first formal decision whether to take enforcement action (e.g., a decision to issue a Notice of Intention to impose a penalty). If guidance changes after OFSI has made its decision, the guidance in place at the time of that decision will generally be used throughout the case. This does not impact OFSI’s application of only the relevant legislation in effect at the time of the breach.

The following does not set out the complete case assessment process that OFSI will use. However, it does provide a detailed overview of the process to help individuals and companies understand what we consider when we assess suspected or actual breaches of financial sanctions.

5.1. Overview

OFSI first establishes whether there has been a breach of a prohibition or a failure to comply with an obligation under sanctions regulations. OFSI then assesses the severity of the breach and the conduct of the individuals or companies involved to determine the overall seriousness of a breach of the case and decides whether enforcement action is appropriate and proportionate on a case-by-case basis.  An example of factors OFSI will take into account when assessing severity and conduct is set out in section 5.5. below.

Following its investigation, OFSI may often assess two or more breaches together as part of a ‘case’ against a subject. Assessing and responding to breaches in this way is both more efficient and fairer. Breaches may be grouped together into a case for a range of reasons, and they could have taken place over several years and relate to different regimes.

OFSI can respond in several ways depending on its assessment. This ensures our enforcement response is proportionate and appropriate. Some of the steps we could take in response to a breach include:

• issuing a private warning letter
• referring regulated professionals or bodies to their relevant professional body or regulator in order to improve their compliance with relevant sanctions
• publishing information pertaining to a breach, even where no monetary penalty is imposed
• imposing a monetary penalty
• referring the case to law enforcement agencies for criminal investigation and potential prosecution.

OFSI may undertake several of these actions in any particular case.

5.2. Establishing whether there is a breach

OFSI will first seek to establish whether there is a breach of a prohibition or a failure to comply with an obligation under sanctions regulations. If there is not, we will close the case.

OFSI is required to consider whether a person had knowledge or reasonable cause to suspect that their actions would result in a breach for any breaches occurring prior to 15 June 2022. For breaches occurring on or after 15 June 2022, this is no longer a requirement and the degree to which a person had knowledge or reasonable cause to suspect will be considered only as a ‘case factor’. This is covered further in section 5.5. below.

However, OFSI will still need to demonstrate that a breach occurred on the balance of probabilities. ‘Balance of probabilities’ is the civil standard of proof and means OFSI considers that, on the evidence, the occurrence of the breach was more likely than not. We will not be seeking to prove facts beyond reasonable doubt (the criminal standard), but to make a judgement on whether it is more likely than not that they are true.

5.3. UK Nexus

A breach does not have to occur within UK borders for OFSI’s authority to be engaged. There simply has to be a connection to the UK, which we call a UK nexus.

Financial sanctions apply to all persons within the territory and territorial sea of the UK and to all UK persons, wherever they are in the world. Individuals and legal entities who are within or undertake activities within the UK’s territory must comply with financial sanctions that are in force. All UK nationals and legal entities established under UK law, including their branches must also comply with UK financial sanctions that are in force, irrespective of where their activities take place.

A UK nexus might be created by such things as a UK company working overseas, transactions using clearing services in the UK, actions by a local subsidiary of a UK company (depending on the governance), action taking place overseas but directed from within the UK, or financial products or insurance bought on UK markets but held or used overseas. These examples are not exhaustive or definitive and will depend on the facts in the case.

Some breaches of financial sanctions involve complicated structures or relationships, where a genuine UK nexus exists but is not immediately apparent. In every case, we will consider the facts to see whether the potential breach comes within our authority.

If we come across breaches of financial sanctions in another jurisdiction, we may use our information-sharing powers to pass details to relevant authorities if this is appropriate and possible under UK law.

5.4. Being fair and proportionate in our assessment

We will treat each case on its own merits. We will assess the facts on a case-by-case basis to decide on an outcome that is fair, proportionate and best enforces the purpose of the regime. In certain circumstances, OFSI may choose not to impose a monetary penalty where alternative and more proportionate remedial action is in the public interest.

We take a number of factors into account when assessing a case. We will consider each factor by referring to our strategy, policy, guidance and processes, and to the specific facts of the case. We may also seek legal advice, and advice from law enforcement agencies.

To ensure our response is proportionate, we will assess overall how severe the case is and the conduct of the persons involved. A relevant factor in this assessment will include whether the person committing the breach knew or suspected that their conduct amounted to a breach of financial sanctions. Broadly, the more aggravating factors we see, the more likely we are to impose a monetary penalty. The greater the severity of the case, and the worse the conduct of the persons, the higher any monetary penalty is likely to be.

Mitigating factors may reduce a monetary penalty we impose or lead us not to take enforcement action. We will take mitigating factors into account when deciding how to proceed with a case.

5.5. Case factors

OFSI will take several factors into account that may aggravate or mitigate a case when determining the facts and how seriously OFSI views the case (the ‘case factors’). Within these case factors, OFSI will separately assess the severity of the breaches and the conduct of the person who has breached, before making an overall assessment of the seriousness of the case.

The case factors set out in this chapter are not an exhaustive list. We reserve the right to consider any factor in a case if it is material and relevant as an ‘Other case factor’. This enables us to consider new situations and ensure all the facts receive due attention. Situation dependant, some case factors within the categories of severity and conduct may also be relevant to consider in the other, or in both, categories.

Some sectors are affected by financial sanctions in ways that require specialist knowledge of the sector to assess. We will always consider specific circumstances when assessing the facts of a case and may take specialist advice to ensure we understand the situation correctly. We may also ask for more information from those involved.

Some of the case factors may either aggravate or mitigate a case depending on the facts. For other case factors, OFSI may view the existence of the factor as aggravating the breach but is unlikely to consider the absence of the factor as mitigating.

The case factors, split between severity and conduct, include the following:

5.6. Severity

OFSI will assess the severity of the breach as it relates to the strategic priority of the sanctions regime to the UK, whether a person deliberately sought to circumvent the prohibitions, value, and the harm or risk of harm.

A. Circumvention of sanctions

A person will usually commit an offence when they intentionally participate in activities knowing that the object or effect of them is (directly or indirectly):

• to circumvent any of the prohibitions
• to enable or facilitate the contravention of any such prohibition or requirement.

Facilitation of a financial sanctions breach is a form of circumvention. Individuals who act on behalf of or provide advice to others as part of their job may be considered professional facilitators. They should ensure they act within the law while representing their client. Simply discovering a potential breach when acting for a client does not automatically make a professional facilitator party to it, but they may become so if their subsequent actions amount to collusion in the breach. Potential breaches should be reported to OFSI.

OFSI takes circumvention very seriously. It attacks the integrity of the financial system and damages public confidence in the foreign policy and national security objectives that the sanctions regimes support. While OFSI will view circumvention as aggravating, it is highly unlikely to consider the absence of circumvention as a mitigating factor.

B. Value of the breach

OFSI will consider the financial value (which may be a reasonable estimate) of the transactions or resources involved in the breach of the regulations as one factor in the overall assessment of the case. While high value breaches are generally more likely to result in enforcement action, there are circumstances involving lower-value breaches where it will be considered appropriate to take enforcement action.

C. Strategic priority of the sanctions regime

OFSI will take into account whether the sanctions regime which has been breached is of particular importance for the UK and its foreign policy. Whilst all sanctions regimes are important, some regimes are particularly significant when it comes to the UK’s national security and foreign policy objectives.

For the avoidance of doubt, while OFSI will consider a breach of a sanctions regime which is a strategic priority for the UK as an aggravating factor, it is unlikely to treat a breach of other sanctions regimes as a mitigating factor.

D. Harm or risk of harm to the sanction regime’s objectives

We will make an assessment of the harm, or the risk of harm, done to the sanction regime’s objectives. Those objectives are set out in the relevant regulations, which describe what activities the regime aims to prevent or encourage - for example, to guard against nuclear proliferation. The greater the risk of harm to the regime’s objectives, the higher we are likely to regard the severity of the breach. For example, OFSI is likely to regard it as aggravating when funds have been made directly available to designated persons or to entities owned or controlled by them.

5.7. Conduct

In making an assessment as to the conduct of the person who has breached, we will consider how each party in a case has behaved.

E. Intention, knowledge and reasonable cause to suspect

For any breaches occurring on or after 15 June 2022, consideration of whether a person had knowledge or reasonable cause to suspect that their actions would result in a breach is no longer part of the legal test for establishing a breach. However, OFSI will continue to assess:

• whether that person intended to breach financial sanctions
• whether that person knew or had reasonable cause to suspect that their actions would breach financial sanctions
• whether there is evidence of recklessness, neglect, wilful ignorance and/or bad faith;
• whether that person should have otherwise known or suspected that their actions would result in a breach of financial sanctions.

OFSI will consider the seniority and/or role of the persons whose actions led to, or contributed to, the breach when assessing the above.

F. Awareness and management of financial sanctions risk

When we consider what action is appropriate, we take into account the level of actual and expected knowledge of financial sanctions held by an individual or entity, considering the kind of work they do and their exposure to financial sanctions risk. We will assess the sanctions risk controls, systems and processes an individual or entity had in place and whether this was proportionate and reasonable to the circumstances and risks the subject was exposed to.

Regulated professionals should meet regulatory and professional standards in how they manage financial sanctions risk. We may consider their failure to do so an aggravating factor.

G. Ownership and control

Where OFSI determines that a breach has occurred, and an incorrect assessment of ownership and control of an entity is relevant to the commission of the breach, OFSI will consider the degree and quality of research and due diligence conducted on the ownership and control of that entity.

The test for establishing ownership and control of an entity is contained in the relevant sanctions regulations, and guidance on the test can be found in OFSI’s general guidance. OFSI does not prescribe the level or type of due diligence to be undertaken to ensure compliance with financial sanctions.

Due diligence

OFSI will consider appropriate due diligence conducted on the ownership and control of an entity to be a mitigating factor where the ownership and control determination reached was made in good faith and was a reasonable conclusion to draw from such due diligence. OFSI may also consider a failure to carry out appropriate due diligence on the ownership and control of an entity, or the carrying out of any such due diligence in bad faith, as an aggravating factor.

The weight to be attributed to the mitigating or aggravating factor (as applicable) will be assessed on a case-by-case basis.

OFSI will consider whether the level of due diligence conducted was appropriate to the degree of sanctions risk and nature of the transaction. The nature of a person’s contractual or commercial relationship with the entity will also be relevant to OFSI’s consideration of the appropriateness of measures undertaken. OFSI would expect to see evidence of a decision-making process that took account of the sanctions risk and considered what would be an appropriate level of due diligence in light of that risk.

OFSI would usually expect these decisions to be made by reference to an internal framework or policy but recognises that there is no one size fits all approach. OFSI expects careful scrutiny of information obtained as part of any ownership and control assessments, particularly where efforts appear to have been made by designated persons to avoid relevant thresholds.

Mitigating circumstances

Depending on the circumstances, OFSI may consider demonstration of any and/or all of the following efforts as potentially mitigating:

• an examination of the formal ownership and control mechanisms of an entity to establish whether there is available evidence of ownership and control by a designated person
• an examination of actual, or the potential for, influence or de facto control over an entity by a designated person
• open-source research on an entity and any persons with ownership of, or the ability to exercise control over, the entity, together with an examination of whether such persons are, or have links to, designated persons such that further investigation may be warranted
• direct contact with the entity and/or other relevant entities to probe into indirect or de facto control, including, where appropriate, seeking commitments by UK persons as to the role of any designated person or person with links to a designated person
• regular checks and/or ongoing monitoring of the above where appropriate.

Whilst the examples below expand on the above by listing some specific potential areas of enquiry, it is not possible for OFSI to set out an exhaustive list of factors that could be considered as each case will depend on its individual circumstances.

Where we determine a breach to have occurred, OFSI will take into account any relevant efforts and checks undertaken. The extent to which the efforts and checks undertaken are appropriate and reasonable in a given case will inevitably depend on the facts of the case, the degree of sanctions risk of the relevant entities and the nature of the transaction.

Example areas of enquiry for assessing ownership and control

Examples of areas of enquiry OFSI may expect to be undertaken by persons seeking to establish whether an entity is owned or controlled by a designated person are below.

It may not be necessary for the due diligence undertaken in a given case to have covered all of the areas of enquiry set out in the below examples, for such due diligence to be a mitigating factor. It may not always be necessary to assess all of these for lower risk activities and transactions, and a relevant consideration may be the existence or lack of a direct or ongoing relationship. These are not intended as, and should not be considered, thresholds for meeting the ownership and control test in the regulations.

Formal ownership and/or control

• The percentage of shares and/or voting power of shareholders.
• The ownership and distribution of other shares in a company.
• Whether ownership / shareholding has recently been altered or divested, including in possible anticipation or response to the imposition of financial sanctions. If so, consideration of whether this warrants further investigation into the possibility of joint arrangements or indirect or de facto control.
• The composition of shares, and whether shares have been split into different classes, or other structural changes made.
• Whether changes to ownership and/or control were part of a pre-planned or wider business/financial strategy.
• corporate constitutional documents, including articles of association or constitution
• Any commercial justifications for complex ownership and control structures.
• Agreements between shareholders or between any shareholders and the entity (for example, shareholders, joint venture, operating, or guarantee agreements).

Indirect or de facto control

• Indications of continued influence (or the potential for it) by a designated person, including through personal connections and financial relationships.
• The presence or involvement of proxies, including persons holding assets on behalf of a designated person.
• Ownership, holdings of shares, or control by trusts associated with a designated person.
• If shares or other ownership interests of a designated person have been divested, the nature of any relationships and prior involvement of the person benefitting.
• If applicable, how recent transfers of shares were funded and whether this was done at an accurate and true valuation.
• Any operational steps taken to ensure that the designated person cannot exercise control over the entity and/or that the designated person cannot benefit from, or use, corporate assets.
• Information relating to the circumstances of board and/or management appointments, including backgrounds, relevant experience, and relationships with designated persons.
• The running of board meetings and governance processes, including board or shareholders’ 14 meeting minutes concerning recent changes in the entity’s ownership and control relating to the designated person.
• Ongoing financial liabilities directly related to a designated person, for example, personal loans, loan guarantees, property holdings, equipment etc.
• Other shareholder agreements, voting agreements, put or call options or other coordination agreements in place between the entity and the designated person or controlled entities.
• Whether there are any benefits conferred to the designated person by the entity or transactions between the entity and the designated person.

Where relationships or activity is ongoing, OFSI expects that due diligence is, and assessments are, reviewed at appropriate times. Ownership and control are not static and OFSI’s consideration of the due diligence undertaken will consider the regularity of checks, and/or ongoing monitoring where appropriate.

For consideration of due diligence as a mitigating factor, the onus for demonstrating that reasonable and appropriate due diligence into ownership and control has been undertaken, and that the ownership and control determination reached was made in good faith and was a reasonable conclusion to draw from such due diligence, rests with the person against whom OFSI is considering taking enforcement action.

H. Repeated, persistent or extended breaches

Repeated, persistent or extended breaches by the same person will be considered as an aggravating factor. This is particularly true when the person is unresponsive to a previous warning and makes further breaches of relevant sanctions. We will view multiple breaches extended over time as being more serious collectively, even if individually they are of low value or relative seriousness. OFSI may consider a person’s conduct to be mitigating where the breach is considered as an isolated event or true ‘one-off’.

Prior enforcement by OFSI, such as warning letters or public outcomes, may also be taken into account and considered aggravating. OFSI may also take into account other facts and circumstances which may be relevant to a wider pattern of conduct.

5.8. Assessment outcome

As part of our assessment as to both the severity of the breach and the conduct of each person involved, OFSI will rate severity as ‘low’, ‘medium’ or ‘high’, and the conduct as ‘mitigating’, ‘neutral’ or ‘aggravating’.

Taking these into account, we will make an overall assessment of the level of seriousness of the case having regard to Figure 5A below which acts as an indicative guide based on the severity and conduct ratings:

Figure 5A: Indicative Matrix Mapping Severity and Conduct to Overall Seriousness Levels

	Low Severity	Medium Severity	High Severity
Mitigating Conduct	Level 1	Level 2	Level 3
Neutral Conduct	Level 2	Level 3	Level 3
Aggravating Conduct	Level 3	Level 3	Level 4

The level of overall seriousness can be linked to the likely outcomes set out in Figure 5B below:

Figure 5B: Indicative Outcomes Linked to Overall Seriousness Levels

Overall Seriousness Level	Likely outcome
Level 1 (low)	These cases are likely to be dealt with via a private warning letter, provided there are no significant aggravating factors, and the breach does not form part of a wider pattern.
Level 2 (moderate)	These cases are likely to be dealt with via a publication without monetary penalty (which OFSI refers to as a ‘Disclosure’) or, less likely, via warning letter.
Level 3 (high)	These cases are likely to result in a civil monetary penalty, with a baseline penalty to be set at up to 75% of the statutory maximum amount.
Level 4 (very high)	These are cases which may be referred for criminal investigation in the first instance. If OFSI pursues the case and a civil monetary penalty is imposed, then the baseline penalty amount would likely be set between 75% and 100% of the statutory maximum amount.

The likely outcomes in Figure 5B do not override OFSI’s discretion to take the action it considers most appropriate in any case. For example, OFSI may decide that, even where conduct is assessed to be neutral, the severity of the breach is so high that it warrants being assessed as Level 4. Conversely, conduct could be assessed to be so highly mitigating that a medium severity breach should be assessed as Level 1 rather than Level 2 and resolved with a warning letter instead of a Disclosure or monetary penalty.

Level 4 cases may involve a very high value, particularly poor, negligent or intentional conduct and/or severe or lasting damage to the purposes of the sanctions regime. OFSI will decide this based on the facts of the case. Level 4 cases are likely to attract a higher monetary penalty level. We will explain why we consider a case to be Level 4 to the person we intend to penalise and when we publish a case summary (if we do).

5.9. Public interest

OFSI will always consider whether pursuing enforcement action, or a particular course of action, is in the public interest. Consideration of the public interest will encompass such issues as the prudent use of public resources and fairness and consistency in applying the law.

In some instances, it may not be in the public interest to take enforcement action even where our assessment of the other factors suggests it may be warranted. Similarly, we are more likely to prioritise cases where the public interest is significant over other similar cases where we judge it is less significant.

6. The monetary penalty process: imposing a penalty

OFSI’s monetary penalty decision process consists of the following parts:

• monetary penalty threshold assessment
• statutory maximum and baseline monetary penalty assessment
• application of relevant discounts
• monetary penalty decision.

6.1. Monetary penalty threshold assessment

Having determined:

• that there has been a breach, on the balance of probabilities, in accordance with section 146 (1) of 2017 Act
• the level of seriousness of the case in accordance with the case factors described in Chapter 5, and
• that there is a public interest in pursuing enforcement action.

OFSI will consider whether a monetary penalty is appropriate and proportionate. OFSI will assess this on a case-by-case basis. We have discretion not to impose a penalty and in practice decide what enforcement response is appropriate depending on the facts of a case.

6.2. Statutory maximum and baseline monetary penalty assessment

Generally, OFSI will impose a level of monetary penalty that is clearly and consistently related to our view of the impact of the case and the value of the case (which may be estimated).

OFSI will first work out the statutory maximum monetary penalty it could impose. If the breach or failure involves specific funds or economic resources, and their value can be estimated, the maximum penalty is the greater of £1 million or 50% of the estimated value. In the event that the value cannot be estimated, the permitted maximum is £1 million. Within this statutory maximum, OFSI will then decide on a baseline penalty level which is reasonable and proportionate, based on our view of the seriousness of the case.

‘Reasonable’ means an ordinary reasonable person would regard the proposed penalty as appropriate to the offence. ‘Proportionate’ means there is a relationship between the value of the proposed penalty, and a holistic assessment of all the other factors present in the case. This does not mean that a penalty should necessarily be either a specific percentage or multiple of the breach amount. It only means it must be neither an insufficient nor excessive response.

OFSI considers that a reasonable and proportionate baseline penalty amount for Level 4 (i.e. the most serious cases) should be at or above 75% of the statutory maximum. In turn, baseline penalties for Level 3 cases should be considered at up to 75% of the statutory maximum. We consider that this provides the correct balance between effectiveness of the deterrent effect and proportionality. OFSI retains its discretion to depart from this indicative approach in appropriate cases.

This policy does not apply to cases that are considered under the Fixed Monetary Penalties (Information and Licensing) process. Please refer to Chapter 13 for how these cases will be dealt with.

6.3. Discounts to the baseline penalty

Having established a reasonable and proportionate baseline penalty amount, OFSI will then consider whether any of the following discounts should be applied to that baseline penalty:

• Voluntary Disclosure and Co-operation discount (up to 30%)
• Early Account Scheme discount (up to 20%)
• Settlement discount (20%).

If two or more of these discounts apply to a case, OFSI will add the discounts together before applying them to the baseline penalty. For example, if OFSI assesses a subject should receive the full Voluntary Disclosure and Co-operation discount of 30% and the subject has also agreed to resolve the matter through settlement thus becoming eligible to a further discount of 20%, OFSI will reduce the baseline penalty amount by 50%.

6.4. Voluntary Disclosure and Co-operation discount (up to 30%)

OFSI considers that, in assessing a monetary penalty, both voluntary, prompt and complete self-disclosure and proactive, full and ongoing co-operation during a subsequent investigation should be rewarded. OFSI will therefore apply a discount of up to 30% for Voluntary Disclosure and Co-operation. In assessing what level of discount up to the maximum 30% should be applied, OFSI will consider the extent to which the subject of an investigation has:

• voluntarily self-reported breaches to OFSI in a prompt manner. OFSI would expect this to be as soon as practicable, and could in many circumstances be an initial disclosure ahead of a fuller report to follow without unreasonable delay
• subsequently provided OFSI with a complete account of the circumstances of the breach
• thereafter co-operated with OFSI’s investigation, including providing voluntary responses in a prompt and complete manner, as well as proactively providing OFSI with additional information and documents to assist OFSI’s investigation.

Where OFSI considers that the above is only partially met, it will generally apply a lower discount than 30%. For example, if a subject did not voluntarily self-report a breach but it then carried out an internal investigation and fully co-operated with OFSI’s investigation, it may still benefit from a lower discount on grounds of good co-operation.

The remainder of this section sets out in more detail OFSI’s expectations that would need to be met before it would give a subject the full Voluntary Disclosure and Co-operation discount of 30%.

6.5. Voluntarily self-reporting to OFSI in a prompt and complete manner

OFSI values voluntary disclosure. Voluntary disclosure of a breach of financial sanctions by a person who has committed a breach will be taken into account when deciding whether to take enforcement action short of a penalty, and if a penalty is imposed a discount may be provided.

In some instances, breaches of financial sanctions must be reported to OFSI. Please note that reporting obligations apply regardless of client confidentiality but remain subject to legal professional privilege. Suspected breaches required to be reported that pertain to a subject’s own conduct are still eligible for discount should enforcement action be taken against the reporting party.

If multiple parties are involved in a breach, we expect voluntary disclosure from each party.

Reports regarding breaches or suspected breaches should be submitted to OFSI using the compliance reporting form on GOV.UK.

To determine whether a subject’s self-reporting is voluntary, we will consider the facts and timing of the disclosure. The mere fact that another party has disclosed first will not necessarily lead to the conclusion that later disclosure by the subject has any lesser value. However, we will not consider disclosure to be voluntary and therefore a mitigating factor if:

• we have required or requested provision of information about a breach or breaches
• the subject has been prompted to disclose facts because OFSI is aware of a case
• the subject has been prompted or required in law to disclose facts because of a separate law enforcement or regulatory investigation.

In relation to whether a report is prompt, we expect a breach to be disclosed as soon as reasonably practicable after discovery of the breach. What this means will differ in each case.

Although it is reasonable for a person to take some time to assess the nature and extent of the breach, or seek legal advice, this should not delay an effective response to the breach. In practice, persons should contact OFSI early to inform us of a breach or potential breach. Where full disclosure is not possible, a person should make an early disclosure with partial information on the basis that it is still working out the facts and will make a further and full disclosure as soon as possible. A timeline for such a full disclosure, including updates if this is likely delayed, would be expected.

In relation to whether a report is complete, we expect disclosures to include all the facts and evidence relating to all aspects of the breach.

OFSI has published separate guidance on the detailed information OFSI expects to be included in breach reports. This may be accessed within each online form on the Reporting to OFSI guidance page.

OFSI will take this into account when considering the completeness of a report. OFSI encourages reporters to include as much detail as possible in their report to assist OFSI’s understanding of the case and circumstances. Reporters should ensure that a report is accurate and materially complete in order for this to be considered in a subsequent enforcement case and to qualify for a discount should a penalty be imposed.

We expect facts to be truthfully stated in good faith. OFSI takes very seriously any evidence that a disclosure did not include relevant information, unless this was a mistake or new facts emerge. Should these be discovered by the reporter, OFSI would expect a proactive correction and update as soon as possible. Where information is not known or not applicable, reporters should make that clear at the outset.

6.6. Co-operation

OFSI values co-operation throughout the course of an investigation and consideration of enforcement action. Co-operation makes enforcing the law simpler, easier, quicker and more effective.

Genuine and full co-operation during the course of an investigation means providing assistance to OFSI that goes above and beyond what the law requires, or merely providing the information OFSI has explicitly requested. Actions which OFSI regards as co-operative may include but are not limited to where the subject of an investigation:

• provides prompt and complete responses to questions put by OFSI on a voluntary basis (i.e., in response to a request where OFSI does not rely on its statutory powers to compel responses)
• identifies and provides OFSI with documents and information beyond that requested which could assist OFSI’s consideration of the case, along with an explanation of the relevance of the material
• proactively undertakes an internal investigation, having engaged with OFSI on the scope of the investigation, providing OFSI with timely updates on its progress and disclosing to OFSI the facts gathered during the investigation
• provides technical briefings to OFSI, for example on the subject’s relevant business processes or financial sanctions control framework, to assist OFSI’s understanding on how the breach occurred and how the subject has remediated, or plans to remediate, any ongoing deficiencies.

OFSI does not consider co-operation is limited to a subject only responding to compelled statutory requests for documents and information. Conversely, OFSI is likely to consider a subject as unco-operative where they provide unnecessarily large amounts of underlying material without explaining how that material is relevant to the matters under investigation. 

6.7. Early Account Scheme discount (up to 20%)

Where OFSI and the subject of an investigation have agreed that the subject can use the EAS, OFSI will provide a discount of up to 20% to the baseline penalty amount if OFSI subsequently decides to impose a monetary penalty, regardless of whether the subject has chosen to settle or contest the case (see Chapter 4 above for further details on the EAS).

In assessing what level of discount up to the maximum 20% should be applied, OFSI will consider the extent to which:

• the subject has provided a clear, comprehensive and accurate account of the breaches together with all relevant underlying documents in accordance with the scope agreed with OFSI
• the subject has completed the account in the time agreed with OFSI
• OFSI was required to subsequently undertake significant additional investigative steps.

6.8. Settlement discount (20%)

Provided that a case is settled and the subject signs the settlement agreement letter before the expiry of the 30 business day settlement discussions (plus any agreed extension), the subject will receive the 20% settlement discount to the baseline penalty. This will not be applicable for cases that may be settled outside of this timeframe (see section 6.9. below for further details on the Settlement Scheme).

6.9. Settlement Scheme

This section explains how OFSI will seek to resolve monetary penalty cases under its Settlement Scheme, including how the scheme works, when settlement is offered and what it means in practice.

How settlement works

Settlement is an agreement between OFSI and the subject of an enforcement action to resolve a monetary penalty case following a time-limited negotiation. As a condition of settlement, the subject will need to agree not to contest OFSI’s findings, in other words to waive their rights to a ministerial review and to appeal OFSI’s decision to the Upper Tribunal. In return, the subject will have the opportunity as part of the negotiations to input into the summary of the case that will be published and will also be entitled to a 20% discount to the baseline monetary penalty (in addition to any other available discount) if they sign a settlement agreement within 30 business days of settlement discussions commencing.

OFSI regards settlement as a means to achieve timely and efficient enforcement outcomes. Resolving cases through settlement reduces the resource burden on OFSI and subjects that would otherwise be spent through the contested monetary penalty process. It can also result in messages about financial sanctions compliance being published sooner and a public perception of timely and effective action. OFSI therefore considers that it is in the public interest for matters to settle, and settle early, if possible.

The Settlement Scheme only applies to monetary penalties and does not apply to other enforcement outcomes, for example Disclosures (see Chapter 12).

Further, OFSI considers that identifying the party on which it is imposing a monetary penalty is in the public interest due to the impact this has in deterring breaches of financial sanctions. It will therefore not agree to settle on the basis of anonymising the subject’s identity.

When settlement is offered

OFSI’s Settlement Scheme will apply to cases where OFSI had not already informed the subject of its intention to impose a monetary penalty (known as a notice of intention) before 9 February 2026.

OFSI will usually consider settlement following completion of the investigation (including any early account) and having assessed the case in accordance with Chapter 5 above. When deciding whether to impose a monetary penalty, the decision maker will also consider whether it would be appropriate to invite the subject to enter settlement discussions. Settlement is likely to be considered appropriate in many cases, but may not be considered appropriate where:

• the breaches appear to have been committed knowingly or intentionally
• the subject is currently, or has previously been, suspected of circumventing financial sanctions, or the breach relates to a circumvention offence
• the subject has not engaged with OFSI in good faith or has failed to co-operate during the investigation.

However, even where breaches appear to have been committed intentionally, or where circumvention is apparent, OFSI may still consider settlement to be appropriate if the subject has taken appropriate remedial action (for example where the individual employees responsible for those actions have been dismissed).

Although OFSI will usually invite a subject to enter settlement discussions prior to issuing a notice of intention, OFSI is open to discussing settlement in later stages of penalty proceedings, for example whilst a subject is considering whether to request a ministerial review or following a ministerial review and before the subject appeals a matter to the Upper Tribunal. However:

• OFSI will not necessarily agree to pause the deadlines set out elsewhere in the guidance (e.g. the deadline by which the subject has to seek a ministerial review) given one of the objectives of settlement is to accelerate the resolution of matters. OFSI is also unlikely to agree to settlement discussions whilst a ministerial review is being conducted; and
• the 20% settlement discount will not be available after the deadline for providing written representations to OFSI has expired.

In cases where a notice of intention was issued prior to 9 February 2026, and where no final decision has yet been resolved, OFSI is open to discussions to settle those cases under a transitional process. In such cases where OFSI agrees to engage in settlement discussions, OFSI will have regard to the higher voluntary disclosure discount that the subject would be eligible for in cases assessed under the previous guidance and the 20% settlement discount would not be applied.

The settlement process

If the decision maker decides settlement may be appropriate, OFSI will invite the subject to enter settlement discussions commencing on a specified date. The invitation will summarise OFSI’s findings and explain the settlement process. The subject will have 10 business days to respond to the invitation and indicate whether they wish to enter settlement discussions.

If the subject agrees to enter settlement discussions, the period for settlement discussions will commence at the time OFSI sends its notice of intention to the subject. OFSI will commence those discussions by sending the subject a draft summary of the case that it intends to publish. The draft summary will be sent under cover of a without prejudice letter which will explain the settlement process and state how long the settlement discussions will last for. In most cases they will last for 30 business days and will run in parallel with the statutory representations period under section 147 of the 2017 Act (see Chapter 7 below).

Although a subject may request an extension to the settlement discussions beyond the 30 business day period, this will only be granted in exceptional circumstances (for example if it would mean a settlement could be reached imminently), and for no longer than an additional 10 business days.

Communications undertaken as part of the settlement discussions will be on a without prejudice basis. This means that any oral or written statements made by the subject or OFSI as part of the settlement discussions will not be referred to or relied upon subsequently by either party if no settlement is reached and the matter is subsequently considered by a minister or the Upper Tribunal.

OFSI will consider the subject’s representations made during settlement and discuss their effect on OFSI’s previous assessment of the breach with the decision maker. The decision maker will decide the appropriate outcome following the settlement discussions including whether it is appropriate for OFSI to enter into a settlement agreement with the subject on the proposed terms, whether to change the proposed penalty amount, whether another enforcement outcome would be more appropriate (including deciding not to take no further action).

The settlement discount

If OFSI and the subject agree to settle, they will enter a written settlement agreement the terms of which will:

• specify the final penalty amount (including any discounts)
• annex the summary of the case that OFSI will publish
• depending on the stage in the enforcement process at which agreement is reached, include an agreement by the subject to waive and not exercise any rights under section 147 of the 2017 Act to make representations, seek a review by a minister or appeal to the Upper Tribunal.

The subject will receive the 20% settlement discount to the baseline penalty provided they sign the settlement agreement letter before the expiry of the 30 business day settlement discussions (plus any agreed extension).

If settlement is not reached, the subject retains the opportunity to submit their written representations in accordance with their statutory rights under section 147 of the 2017 Act before the expiry of the same 30 business day period.   

6.10. Monetary penalty decision

A recommendation to impose a monetary penalty will be based on OFSI’s assessment of the maximum monetary penalty, the baseline penalty and the extent to which any discounts apply.

This recommendation is then considered by a decision maker, who can decide to agree, change or reject the recommendation. Once determined, this is then communicated to the person on whom OFSI intends to impose the penalty. They have a right to make representations (see Chapter 7 below) which could change OFSI’s view on whether a monetary penalty should be imposed, or the value of any penalty.

6.11. Monetary penalties for information and licensing offences

A failure to comply with a request made under the regulations, or provide required information, may be treated as a breach of the regulations subject to monetary penalty.

For relevant firms, as defined in regulations made under SAMLA 2018, a failure to report information on breaches of financial sanctions may be a criminal offence. This offence is created by regulations, so it comes within the scope of OFSl’s powers to impose monetary penalties.

For all persons, as defined in regulations made under SAMLA 2018, a failure to comply with the annual frozen asset review reporting requirement, without reasonable excuse, may be a criminal offence. This offence is created by the regulations, so it comes within the scope of OFSI’s powers to impose monetary penalties.

Examples of the kind of scenarios that OFSI would potentially consider as a reasonable excuse can include but are not limited to the below:

• there is an unprecedented number of new designations immediately prior to 30th September that may hinder or delay providing a report to OFSI
• an unforeseeable clerical error which may require resubmission of a report to OFSI.

There are also certain requirements, including reporting on the use of exceptions, where failure to comply with an obligation is not a criminal offence but for which OFSI can still impose a monetary penalty.

Further information on reporting obligations can be found in Section 5 in OFSI’s UK Financial Sanctions general guidance.

OFSI issues licences to permit acts that would otherwise breach prohibitions imposed by financial sanctions. We often set reporting requirements in licences. If a person fails to comply with reporting requirements in an OFSI licence, it may be an offence and we may issue a monetary penalty.

OFSI also has broad powers to require certain information from anyone. It may be a criminal offence in its own right not to provide it. We may issue a penalty if, for example, OFSI has specifically demanded information that has not been provided, or our demand for information has been refused, particularly when this has the effect of frustrating our proper case assessment.

OFSI will impose a level of monetary penalty that reflects the seriousness of the information related offence. We may impose a penalty for information offences relating to a breach as well as the penalty for the breach itself.

Monetary penalties for information offences may either be imposed under the full monetary penalty process as described above in Chapter 6, or via the Fixed Penalty process as set out in Chapter 13. Chapter 13 sets out further information on when each process may be used.

While, as noted above, civil enforcement options are already in place for information offences, this was further clarified by section 214(1) of the Economic Crime and Corporate Transparency Act 2023. Section 214(1) amended the Policing and Crime Act 2017 and came into force on 15 November 2023.

7. Procedure for imposing a monetary penalty

Section 147 of the 2017 Act, regulation 88D of the Russia regulations and regulation 56D of the Belarus regulations set out the steps that HM Treasury must take to impose a monetary penalty, the rights that a person has to make representations and seek a review, and the right to appeal the decision to the Upper Tribunal. This chapter explains the processes involved.

Before imposing a monetary penalty on a person, HM Treasury, through OFSI, must inform the person of its intention to do so. We will normally do so in writing in a notice of intention. OFSI will:

• explain the reasons for imposing the penalty
• specify the penalty amount and how it has been calculated
• explain that the person is entitled to make representations and specify how long they have to do so.

OFSI will explain in the notice of intention the reasons for the monetary penalty by summarising our case assessment in enough detail to justify why it is appropriate and also to allow the person to make meaningful representations.

7.1. Making representations

OFSI wants the process of making representations to be fair, proportionate and effective. A person may make representations about any relevant matters. These may include, for example, matters of law, the facts of the case, our interpretation of the facts, how we have followed our processes, and whether the penalty is fair and proportionate. A person may also make representations on the effect that publication of the imposition of a monetary penalty would have on them or their company (or both).

We may consider but disregard representations that are irrelevant. If we disregard a representation, we will explain why in our response.

Representations must be in writing and in a format that:

• summarises each point that the person wishes OFSI to take into account
• explains why these points are relevant
• explains how the person expects these points to affect our case decision or penalty level
• evidences any assertions of fact
• provides copies of supporting documents as required, with relevant sections highlighted as appropriate.

Considerations for making representations

• OFSI requires representations in writing so that it has a clear record of all information considered when making the decision. Consequently, OFSI will not normally allow representations to be made in person but will consider any request to do so. If a party feels that they are disadvantaged by being unable to make representations in person then they may make an application to OFSI stating their reasons, and we will take this into account.

• Representations may be made by the person penalised or a properly appointed representative or agent. OFSI will usually require written evidence that a representative or agent has been properly appointed before OFSI will communicate with them about the person’s affairs.

• OFSI will not normally consider representations by a third party unless they form part of the representations made by the person penalised or their agent. This ensures we take into account only representations the person wishes us to.

• The person has 30 business days to make written representations from the date of our initial letter. We will not normally accept late representations. Persons or their representatives may ask us to extend this period and must provide evidence of the reasons for that request.

• If no representations are made within this period, the monetary penalty is finalised and becomes payable. We will issue a written notice stating the penalty amount and how payment should be made.

• If representations are made, we will consider them and review both the case assessment and the monetary penalty level in the light of them. Potential outcomes include reaffirming our decision to impose a penalty, changing the proposed penalty amount, or deciding not to impose a penalty.

• OFSI will normally consider and respond to representations within 30 business days after the final date of the period for making representations. However, we may extend the period if this is necessary to ensure a fair assessment of the representations. We will inform the person of any extension and will respond as soon as we are able.

• OFSI will write to the person or their representative with our final assessment, taking into account the representations. The penalty becomes payable at this stage. If the assessment means we still intend to impose a penalty, our letter will include advice on the person’s right to seek a review, as set out in Chapter 8.

7.2. Financial hardship

In exceptional circumstances, OFSI may reduce a monetary penalty where a subject is unable to pay the penalty due to their financial position. There can be no expectation that a penalty will be adjusted on this basis. A financial hardship claim needs to be made by the subject concerned as part of their representations, and they have the burden of proving that they merit such a reduction.

OFSI will only grant such a reduction on the basis of objective evidence that the imposition of the proposed penalty would cause the subject severe financial hardship, and that it would not be in the public interest to do so. OFSI may consider receiving payment of the penalty amount in agreed instalments to address short term financial constraints. There may be cases where, even though the subject can satisfy OFSI that payment of the financial penalty would cause them financial hardship, OFSI considers the breach to be so serious that it would not be appropriate to reduce the penalty.

OFSI expects the subject to disclose verifiable evidence of their finances in a full, frank and timely manner, and co-operate fully in responding to any questions asked by OFSI about their financial position.

8. The right of review

This chapter replaces guidance for all reviews requested after 00:00 hours on 15 June 2022.

Section 147 of the 2017 Act states at subsections 3 to 8:

(3) If (having considered any representations), the Treasury decides to impose the penalty, the Treasury must-

    (a) inform the person of its decision

    (b) explain that the person is entitled to seek a review by a Minister of the Crown

    (c) specify the period within which the person must inform the Treasury that the person wishes to seek such a review.

(4) If the person seeks a review, the Minister may-

    (a) uphold the decision to impose the penalty and its amount,

    (b) uphold the decision to impose the penalty but substitute a different amount, or

    (c) cancel the decision to impose the penalty.

(5) If on a review under subsection (4) the Minister decides to uphold the Treasury’s decision to impose the penalty and its amount, or to uphold the Treasury’s decision to impose the penalty but to substitute a different amount, the person may appeal (on any ground) to the upper tribunal.

(6) On an appeal under subsection 6, the upper tribunal may quash the Minister’s decision and if it does so may-

    (a) quash the Treasury’s decision to impose the penalty;

    (b) uphold that decision but substitute a different amount for the amount determined by the Treasury (or, in a case where the Minister substituted a different amount, by the Minister).

(7) In this section, ‘Minister of the Crown’ means the holder of an office in Her Majesty’s Government in the United Kingdom.

8.1. Process for review

OFSI will inform the person of our final decision to impose a monetary penalty in writing. In the same letter we will explain their entitlement to a review of the decision. In such circumstances, where a review is requested, such review will be undertaken by people not involved in the original case assessment.

The person will have 30 business days from the date of our letter to inform HM Treasury that they want a review. They can request an extension to the timeframe in exceptional circumstances, and OFSI will consider such requests on a case-by-case basis. This request must be in writing, unless there is a good reason for not doing so, and sent to OFSI.

The request must include:

• a statement that the person is using their right under relevant legislation to seek a review of a monetary penalty for breaching financial sanctions regulations
• a summary of why they seek the review.

The review will not normally be a way of introducing new material, and no further material is required from the person. It reviews the decisions OFSI has taken based on the material we have used to assess the case, after the person has had an opportunity to introduce any material they wish to at the representations stage.

Financial sanctions are dealt with by Treasury ministers. Whilst a minister may carry out the review, they may also delegate to a senior official to carry out the review at their discretion, noting that a minister is not required to conduct the review personally.

8.2. After receiving a review request

On receiving a review request, OFSI will prepare a summary of the case for the relevant minister or senior official that will explain the decisions OFSI took and why. The report will be accompanied by relevant material OFSI has about the breach, including any representations the person made.

To ensure a separation of decision-making and review, OFSI will not recommend a course of action to the decision maker. We will pass on the initial request and provide the summary and material to a minister or senior official. A minister or senior official may question OFSI officials to clarify existing materials or information related to the case.

HM Treasury will aim for most reviews to be concluded within 2 months. However, this period may be extended if required.

After reviewing the case, a minister or senior official will make a decision. This may be that:

• the decision to impose the penalty and its amount is upheld
• the decision to impose the penalty is upheld, but a different amount is substituted
• the decision to impose the penalty is cancelled.

This decision will be communicated in writing to the person. If the penalty is upheld, at the original or a different amount, the penalty is finalised and becomes payable.

8.3. How to make representations or request a review

Both representations and requests for review must be made in writing (unless oral representations have been agreed) by:

Email: ofsi@hmtreasury.gov.uk

Post:

Office of Financial Sanctions Implementation
HM Treasury
1 Horse Guards Road
London
SW1A 2HQ

8.4. Procedural Mistakes

It may be that OFSI mistakenly fails to fulfil part of this process within the requirements set in law or this guidance. If this is discovered during the process, OFSI will always seek to remedy the mistake by returning the process to the point the mistake was made and progressing the case correctly from that point.

OFSI will not automatically cancel a penalty after issue simply because of a procedural mistake. We will always review whether the mistake means we should reconsider the imposition of a penalty or its amount. This will help ensure a proper balance between the rights of a person on whom we impose a penalty and the public interest in ensuring the law is properly enforced.

9. Right of appeal

A person must seek a review before they can appeal to the Upper Tribunal. If on review the decision is made to uphold the decision to impose the monetary penalty and its amount, or to uphold the decision to impose the monetary penalty but to substitute a different amount, section 147(6) of the 2017 Act, regulation 88D (5) of the Russia regulations and 56D (5) of the Belarus regulations enables a person to appeal (for any reason) to the Upper Tribunal.

Upper Tribunal procedure is outside the scope of this guidance. It is not a process managed by HM Treasury. View the Upper Tribunal procedure rules on this link.

A notice of appeal must be made in writing and received by the Upper Tribunal no later than 28 days after notice was given of the decision under challenge. Schedule 4 of the Upper Tribunal procedure rules, as inserted by The Tribunal Procedure (Amendment) Rules 2017, sets out what must be stated in the notice of appeal, and what must be provided with the notice of appeal.

The subsequent stages of the appeals process are set out in Schedule 4 of the Upper Tribunal procedure rules, as amended by The Tribunal Procedure (Amendment) Rules 2017.

During the appeal, the person who has been subject to a monetary penalty will be required to produce sufficient evidence to convince the independent tribunal that a penalty should not have been imposed.

On an appeal under section 147(6) of the 2017 Act and regulation 88D (5) of the Russia regulations and 56D (5) of the Belarus regulations, the Upper Tribunal may quash the review decision. If it does so, it may either quash the decision to impose the penalty or uphold the decision but amend the amount of the penalty.

10. Paying a monetary penalty

Once a monetary penalty becomes finalised and payable, OFSI will inform the person concerned how they should pay.

Payment should be made within 30 business days of the date the penalty has been imposed and should not be unreasonably delayed. We can discuss payment timing with persons subject to a penalty.

HM Treasury will pursue non-payment of debt by appropriate means. Section 146 (11) of the 2017 Act, regulation 88C (8) of the Russia regulations and regulation 56C (6) of the Belarus regulations all say any monetary penalty payable under this section is recoverable by the Treasury as a civil debt.

Section 146 (12) of the 2017 Act and regulation 88C (9) of the Russia regulations and regulation 56C (7) of the Belarus regulations all say any monetary penalty received by the Treasury by virtue of this section must be paid into the Consolidated Fund.

This means that the payment goes into the UK Exchequer’s general funds for use by the government.

11. Publication of penalties

11.1. Monetary penalties

Section 149 (2) of the 2017 Act says the Treasury must, at such intervals as it considers appropriate, publish reports about the imposition of monetary penalties under section 146 or 148.

OFSI will normally publish details of all monetary penalties it imposes, as a summary of the case. Publishing such details helps increase awareness, deter future non-compliance and promote good practice.

This summary will set out the following:

• who the penalty has been imposed on - each person, company or entity
• the summary facts of the case, including breach type, sanctions regime, the regulation broken, and whether there was voluntary disclosure
• the aggregated GBP value of the transactions which are in breach of the regulations, where this can be identified, and why OFSI imposed the monetary penalty (where applicable)
• the GBP penalty value imposed on each person (where applicable)
• compliance lessons OFSI wishes to highlight in this case, to help others avoid committing a similar breach
• other information required to give a true understanding of the case and OFSI’s consideration of it.

11.2. Non-monetary penalty

OFSI may also choose to publish details of breach cases where no monetary penalty has been imposed. Further details on the circumstances in which OFSI may choose to make a Disclosure are set out in Chapter 12 of this guidance. We may draw attention to the imposition of a monetary penalty or breach of financial sanctions where no monetary penalty has been imposed through media relations, highlighting the case and the action we took.

We will not generally make public more than a summary of the case. To do so may increase the risk of financial sanctions contravention, particularly where a new technique has been used to circumvent the law. Any information not published may be exempt from release under the Freedom of Information Act 2000 (‘FOI’). We will review and consider any FOI request on its own merits.

OFSI will continue to assess each breach on a case-by-case basis and determine what remedial action is appropriate in line with the principles set out in this guidance.

11.3. Other circumstances

There may be circumstances in which we decide that it is not appropriate to publish a summary, for example where it is not in the public interest to do so or where the impact of publishing is considered to be disproportionate. It is for the person to tell us during representations about any effect that publication of a report may have, and we will consider it at that point.

We would normally expect to publish a summary where it is in the public interest and there may be compliance lessons to be shared, therefore, the bar for not doing so will be high.

OFSI recognises there may be different publication considerations where the breach has been carried out by an individual rather than an entity.

If we do not publish a summary or decide it is not proportionate, we will satisfy the requirement at section 149(2) by either publishing an anonymised report, or by including the case in statistical information and any aggregated reporting OFSI publishes.

11.4. Timing of publication where a monetary penalty is imposed

OFSI will not normally publish the case summary where a monetary penalty has been imposed until after the person has had the opportunity to exercise their right to a review - either they have asked for a review and the minister or senior official has decided a monetary penalty should be imposed, or once the deadline for requesting a review set out in this guidance has elapsed. If the person, after requesting a review, subsequently appeals to the Upper Tribunal, and if the tribunal subsequently amends or quashes the penalty, OFSI will publish amended information setting this out in place of our original report.

12. Publication of breaches where no monetary penalty is imposed

The guidance in this chapter, in relation to the 2017 Act, applies to all cases where a financial sanctions breach has taken place on or after 00:00 15 June 2022. This chapter sets out OFSI’s approach to publishing the details of breaches of financial sanctions in accordance with powers set out in Part 8 of the 2017 Act where a monetary penalty has not been imposed.

Furthermore, regulation 88C(10) of the Russia regulations and regulation 56C (8) of the Belarus regulations also provide for the publishing of details of breaches of financial sanctions obligations.

Publications made under section 149(3) of the 2017 Act are referred to as ‘Disclosures’.

Section 149 (3) of the 2017 Act says:

The Treasury may also publish reports at such intervals as it considers appropriate in cases where—

    (a) a monetary penalty has not been imposed under section 146 or 148, but

    (b) the Treasury is satisfied, on the balance of probabilities, that a person has breached a prohibition, or failed to comply with an obligation, that is imposed by or under financial sanctions legislation.

12.1. Circumstances in which OFSI may make a Disclosure

As set out in Chapter 5, OFSI categorises cases by seriousness level. Cases which OFSI deems to be of Level 2 seriousness may be dealt with by a Disclosure if OFSI considers a warning letter would be too lenient, but a monetary penalty would be disproportionately punitive.

Such Disclosure will usually publicly name the firm or individual who has committed the breach and provide a summary of the facts of the breach. There are also other circumstances in which OFSI may deem a Disclosure to be a fair and proportionate outcome, including:

• where there are valuable lessons to be learnt for industry; and
• exceptionally, where it is not in the public interest to issue a monetary penalty.

A Disclosure which highlights compliance lessons for industry may focus on an individual case or deal with several cases of a similar nature. This will allow OFSI to highlight specific risks as well as broader trends which may make it easier for industry actors to comply with financial sanctions.

The bar for OFSI making a Disclosure in lieu of a monetary penalty (where the case is assessed as serious enough for a monetary penalty) is high and this option is reserved for genuinely exceptional circumstances. For example, this might be appropriate in certain humanitarian cases where a breach is serious enough to justify a penalty but, on the particular facts, a monetary penalty would not be in the public interest.

12.2. Timing of publication where a Disclosure is made

Where OFSI intends to make a Disclosure, OFSI will, prior to publication, inform the person that OFSI has assessed to have committed a breach of our intention to publish a case summary if it is OFSI’s intention to name the person in the Disclosure.

OFSI will provide the person with 30 business days from this date in which to make any representations in relation to the finding of a breach and intended publication of the case summary. Persons or their representatives may ask us to extend this period and must provide evidence of the reasons for that request.

Where OFSI intends to make a Disclosure but does not intend to name the person who committed the breach OFSI will inform the person of its intention to make a Disclosure but will not invite representations.

Following consideration of any representations made, OFSI may:

• decide to publish details of the case
• decide to publish details of the case, but details of what OFSI had intended to publish may be changed
• decide not to publish details of the case.

If, following representations, OFSI upholds its decision to publish details of the case, OFSI will share the written case summary in advance of publication for the purpose of ensuring factual accuracy.

Please note that section 147 of the 2017 Act setting out a person’s entitlement to seek a review by a minister or senior official and to (in specified circumstances) appeal to the Upper Tribunal a decision by HMT to impose a monetary penalty does not apply where a monetary penalty has not been imposed.

12.3. Information included in a Disclosure

A Disclosure may include the following information:

• who committed the breach
• the summary facts of the case including breach type, sanctions regime, the regulation broken, and whether the breach was self-reported
• the aggregated GBP value of the transactions which are in breach of the regulations, where this can be identified, and why OFSI decided to publish a case summary
• compliance lessons OFSI wishes to highlight in the case, to help others avoid committing a similar breach
• other information required to give a true understanding of the case and OFSI’s consideration of it.

OFSI will identify the designated person to whom the breach relates as a fact in the case unless there are strong reasons not to. This will include consideration of data protection obligations as appropriate.

Where a Disclosure is made solely for the purpose of highlighting compliance lessons for industry and the breach is considered to be of lesser severity, OFSI will not usually identify who performed the breach.

Disclosures will be published on OFSI’s enforcement of financial sanctions page alongside publications related to civil monetary penalties. OFSI may refer to Disclosures in other publications it produces or in the course of its outreach activities to promote compliance lessons or raise awareness of financial sanctions risks.

13. Fixed Monetary Penalties (Information and Licensing)  

This chapter is supplementary to Chapters 6 and 7 on monetary penalties and covers how penalties will be imposed for certain cases dealt with by means of a fixed monetary penalty (information and licensing) (‘fixed penalty’).

13.1. How fixed monetary penalties work

The intention of this separate process is to provide more certainty as to how these offences will be enforced against through a more proportionate and efficient process. OFSI places significant importance on compliance with information, reporting and licensing requirements. OFSI will retain discretion to impose penalties below or up to the statutory maximum for specified offences should they be warranted.

A fixed penalty can apply to the following types of offence (‘applicable offences’): 

• non-compliance with reporting obligations, including both failure to report and late reporting without reasonable excuse

• incomplete or otherwise non-compliant reporting on specific and general licences 

• failing to respond or responding late to a Request for Information

• breaches of specific and general licences, including breaches involving funds or economic resources with a value of up to £10,000. 

This policy does not apply to cases concerning the requirement for designated persons under the Russia and Belarus regulations to report their own assets to OFSI.  

Not every offence outlined above will result in a fixed penalty. Many ‘first time’ or ‘one-off’ offences can be dealt with via private enforcement action. The decision to proceed to penalty stage will depend on the conduct of those involved and the severity of the offence. Some offences may also be so serious that OFSI judges it appropriate to apply the full monetary penalty process and consider a penalty up to the statutory maximum. Repeated offending even after receipt of a £10,000 fixed penalty is more likely to result in a penalty under the full monetary penalty process. 

Figure 13A: Indicative enforcement outcomes for applicable offences

Offence type	Nature of offence	Outcome
Non-compliance with reporting obligations (covered by Finance: Licensing offences)	First/second occurrence of non-compliance e.g. non-reporting, late reporting, failure to provide supporting evidence.	Private warning letter
	Third occurrence of non-compliance e.g. non-reporting, late reporting, failure to provide supporting evidence where an OC3 letter has been issued for previous non-compliance on two occasions which have provided the breacher with an opportunity to improve their conduct.	More likely to be dealt with via fixed penalty
	Repeated failure to report use of a licence or licences, across a significant time period.	More likely to be dealt with via fixed penalty
Breaches of specific and general licences up to £10,000 (not in compliance with the permission of a licence)	Funds made directly available to a DP NB. Other offences of this nature exist but their outcome will be dependent on the case factors.	More likely to be dealt with via fixed penalty
Failure to respond to a Request for Information RFI (covered by Finance: information offences)	Repeated instances of failure to properly engage, refusal to engage or provide compelled information.	More likely to be dealt with via fixed penalty

13.2. Assessing the penalty amount 

Fixed monetary penalties will have a value of either £5,000 or £10,000 dependent on the severity of the offence and the aggravating/mitigating nature of the of the person’s conduct. 

A £5,000 penalty may be applicable where a person has failed to: 

• respond to a Request for Information without reasonable excuse
• comply with a condition and/or permission of a licence.

Examples of where a £5,000 penalty is likely to be appropriate include:

• where a failure to respond has frustrated an OFSI investigation
• where a person has made minimal or no efforts to rectify non-compliance and co-operate such as failing to report on use of a licence on time
• a person exhibiting repeated poor conduct when committing an information or licensing offence (e.g., where OFSI has sent prior warning letters, or other instances of clear and sustained non-compliant behaviour)
• where a transfer of funds has not followed the correct payment route as set out in the permissions of the licence.

 A £10,000 penalty may be applicable where a person has failed to: 

• respond to a Request for Information without reasonable excuse, with aggravating factor(s)
• comply with a condition and/or permission of a licence, with aggravating factor(s).

Examples of where a £10,000 penalty is likely to be appropriate include:

• where a person’s conduct could be considered serious enough to constitute an aggravated offence
• a person exhibiting repeated poor behaviour (e.g., a £5,000 penalty has been imposed previously)
• a person recklessly provides information which is materially false or incomplete in response to a request.

13.3. Issuing a Penalty and Representations Stages

Whilst the process of a fixed penalty will otherwise mirror that of other OFSI penalties, timeframes for representations and a review will be halved. This is to reflect the generally lower value and simpler nature of such cases.

This means that the representations stage for a fixed penalty once a notice of intention is issued is 15 business days. OFSI will then have 15 business days to make a decision, and a review must be requested within a further 15 business days.

All fixed penalty cases will be published on gov.uk with the subject named as per the full penalty process.

Settlement is not available for cases dealt with by means of a fixed penalty.