OFSI Overhauls Sanctions Enforcement Framework

The Office of Financial Sanctions Implementation (OFSI) has published its response to a public consultation on significant changes to its enforcement framework, marking a material shift in how the UK enforces financial sanctions. Announced on 29 January 2026 by Giles Thomson, Director of OFSI, the revised approach is designed to deliver faster outcomes, greater transparency for firms and a more robust deterrent against sanctions breaches.

The reforms follow a 2025 cross-government review of sanctions implementation and enforcement, which identified the need to strengthen the effectiveness and credibility of the UK’s sanctions regime. Against a backdrop of rising case volumes and increasing complexity since Russia’s illegal invasion of Ukraine in February 2022, OFSI is repositioning its enforcement model to prioritise impact rather than volume. As of April 2025, OFSI was managing 240 active investigations, a sharp increase from 172 two years earlier, prompting a strategic rethink of how resources are deployed.

Central to the new framework is a more selective approach to case prioritisation. OFSI will focus enforcement activity on cases that are most serious, support wider strategic objectives or expose systemic weaknesses within firms or sectors. This signals a clear move away from purely value-based assessments and towards an intelligence-led enforcement posture aligned with broader national security and foreign policy goals.

To support faster resolution of cases, OFSI is introducing several new mechanisms. A Settlement Scheme will allow certain cases to be resolved more quickly, with firms eligible for a 20 per cent discount on the baseline penalty. An Early Account Scheme will enable subjects to provide a comprehensive account of a breach at an early stage, potentially expediting investigations and attracting a further discount of up to 20 per cent where enforcement action is taken. These measures are intended to reduce prolonged investigations, lower resource burdens for both regulator and industry, and bring compliance lessons into the public domain more rapidly.

Transparency is also a core theme of the reforms. OFSI will publish a new case assessment matrix to provide clearer insight into how penalties are calculated, alongside revised discounts for voluntary disclosure and co-operation of up to 30 per cent. In addition, a streamlined enforcement process with fixed penalties will be introduced for information, reporting and licensing offences, offering greater consistency and predictability for firms navigating compliance obligations.

Perhaps the most consequential proposal is the planned increase in statutory maximum penalties. OFSI intends to double the maximum civil monetary penalty from the greater of £1m or half the value of the breach, to the greater of £2m or the full value of the breach. While this change requires legislative amendment and will be implemented when parliamentary time allows, it sends a clear signal that sanctions enforcement is moving towards a more muscular deterrence model.

Alongside procedural changes, OFSI has indicated a cultural shift towards greater dialogue in serious cases, including the possibility of meetings to discuss technical issues or contextual information. While written engagement will remain the default, this reflects a more pragmatic and outcome-focused approach to complex investigations.

Most elements of the new framework will come into effect with the publication of updated Enforcement and Monetary Penalties guidance in February 2026. For regulated firms, the message is clear: sanctions compliance expectations are rising, enforcement will be faster and more targeted, and the cost of serious failures is set to increase. The reforms underline the UK’s intent to ensure financial sanctions remain a credible and effective tool of foreign and security policy, backed by enforcement that is both proportionate and uncompromising.

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