OFSI updates sanctions General Guidance to include new HM Treasury debt exception

On 9 July 2025, the Office of Financial Sanctions Implementation (OFSI) published an update to its General Guidance, introducing a new exception for payments relating to HM Treasury debt. This exception permits payments to or for the benefit of individuals designated under United Nations sanctions regimes, provided strict conditions are met.

Specifically, the exception applies where the payment obligation arose prior to the individual’s designation and allows funds to be paid into accounts specified by the exception. These include frozen UK bank accounts or accounts in jurisdictions that correspond with UK sanctions regimes. The exception is intended to ensure that pre-existing liabilities to HM Treasury can be met without undermining the financial sanctions framework.

Importantly, use of this exception requires that reasonable steps are taken to ensure compliance. Firms should refer to section 6.21 of OFSI’s General Guidance for detailed information on the application of this exception, including record-keeping and due diligence expectations.

This development reflects HM Treasury’s ongoing efforts to balance the UK’s compliance with international sanctions obligations while ensuring that legitimate debts owed to HM Treasury can be discharged appropriately.

For firms and professionals subject to UK financial sanctions, it is essential to review these changes and assess any exposure to obligations affected by this new exception.