UK Government Launches Major Sanctions Overhaul to Strengthen Compliance & Enforcement

The UK Government has unveiled sweeping measures to enhance the implementation and enforcement of sanctions, as part of a comprehensive cross-government review aimed at reinforcing national security, deterring malign behaviour, and supporting international law. The Foreign, Commonwealth and Development Office (FCDO) led the strategic review, working closely with departments including HM Treasury, the Department for Business and Trade, the National Crime Agency and HM Revenue and Customs.

Modernising the UK Sanctions System

Since the Sanctions & Anti-Money Laundering Act 2018 (SAMLA) came into force, the UK has continued to evolve its sanctions regime. In the wake of global crises and new security threats, the Government has taken decisive steps to make the system more agile, transparent and effective.

Recent updates have led to new powers across departments, increased civil and criminal enforcement activity, and record penalties, such as the £465,000 fine issued by the Office of Financial Sanctions Implementation (OFSI) in March and HMRC's £1 million settlement in August 2023 for Russia-related breaches.

Key Review Findings & Commitments for 2025–26

The review centred on three key themes: facilitating compliance, increasing deterrence, and enhancing enforcement capabilities. Highlights of the Government’s immediate action plan include:

• Consolidated Guidance & Outreach: Targeted, user-friendly guidance will be rolled out to support smaller businesses and under-informed sectors, alongside a full refresh of the sanctions content on GOV.UK.

• Single Sanctions List: The UK will merge the Sanctions List and the Consolidated List into a unified database to simplify screening processes.

• Ownership & Control Clarity: New measures will clarify due diligence expectations, helping firms avoid costly compliance missteps.

• Accelerated Enforcement Tools: A new fast-track penalty scheme and an early settlement mechanism for financial sanctions breaches will streamline civil enforcement and reduce the burden on industry.

• Sanctions Enforcement Strategy: A first-of-its-kind cross-government strategy will articulate the UK’s approach to enforcement, inspired in part by international models such as OFAC’s enforcement framework.

• Improved Reporting & Whistle-blower Protections: The Government will simplify breach reporting and extend whistle-blower protections to include financial, transport and trade sanctions.

  
  

Strengthening the Toolkit & Government Coordination

The review has also recommended a broader, longer-term transformation of enforcement capabilities. Notably, it proposes the creation of a joint sanctions intelligence function, additional end-use export controls, and expanded civil enforcement powers in Overseas Territories.

The Economic Deterrence Initiative (EDI) continues to be a key enabler, funding improvements such as new sanctions powers for DBT and DfT, the launch of the Office of Trade Sanctions Implementation (OTSI), and enhanced detection capabilities targeting Russian sanctions evasion and the shadow-fleet.

Stakeholder Engagement & Industry Feedback

A wide-ranging consultation informed the review, with input from trade associations, financial institutions, legal experts, manufacturers and international partners. Industry stakeholders welcomed the establishment of OTSI and called for:

• Better organised, thematic guidance

• Stronger alignment on ownership rules with international partners

• A more unified sanctions ‘brand’ and alert system

• Publicised enforcement actions that explain rationale and remediation steps

The review also highlighted the need for bold reforms to reduce administrative burdens and encourage higher-quality reporting. These include greater use of general licences, more flexible implementation models, and improved public-private collaboration.

A Clear Message of Accountability & Deterrence

The UK’s refreshed sanctions approach affirms that breaches will not go unpunished. With criminal prosecutions, civil penalties, and now new settlement and disclosure options, the Government is building a multi-faceted enforcement ecosystem.

Sanctions are at the heart of our foreign policy. This review shows our commitment to taking robust, proportionate action against those who threaten global peace and security. These reforms will make it easier to comply, harder to evade, and clearer to understand.

Looking Ahead

With implementation planned across the 2025 to 2026 financial year and beyond, the UK Government is setting a new global benchmark for sanctions compliance, enforcement and effectiveness. As the geopolitical landscape evolves, this modernised framework ensures the UK is better equipped to uphold its values and protect national security.

Read the report here.