OFSI Enforcement Round-Up: Key Decisions
December 2025As 2025 draws to a close, we round up below the Office of Financial Sanctions Implementation (OFSI) decisions that have shaped the compliance landscape over the last 12 months. OFSI, part of HM Treasury, enforces UK financial sanctions under the Policing and Crime Act 2017 (PACA) and related regulations. These cases demonstrate the range of enforcement tools available, from monetary penalties to public disclosures, and provide important lessons for firms and charities.
Herbert Smith Freehills CIS LLP (November 2024)
Regime: Russia (Sanctions) (EU Exit) Regulations 2019
Background: HSF Moscow made six payments totalling £3.93 million to designated banks during the closure of its Russian office. Despite having sanctions policies and training in place, senior staff failed to follow procedures and made payments in haste. OFSI noted inadequate due diligence and a failure to properly assess ownership and control.
Penalty: OFSI imposed a penalty of £465,000 after applying a full 50% discount for prompt voluntary disclosure.
This case underscores the risks of hurried transactions during market exits and the need for strict adherence to compliance processes, even under pressure. Firms should ensure that sanctions screening and due diligence measures are followed by all staff, regardless of seniority.
Markom Management Ltd (January 2025)
Regime: Ukraine (EU Financial Sanctions) (No.2) Regulations 2014
Background: Markom Management Ltd instructed a payment of £416,590.92 to a designated person in February 2018 following an overpayment identified in a transaction involving a former client. OFSI found that the company had reasonable cause to suspect the breach but prioritised speed over compliance.
Penalty: OFSI imposed a £300,000 penalty after assessing the case as serious. No voluntary disclosure discount was applied.
Firms must understand sanctions exposure and seek advice where needed. Informal cross-border practices can create unmanaged risk. Robust compliance frameworks are essential.
Charities Disclosure (March 2025)
Regime: Counter-Terrorism (International Sanctions) (EU Exit) Regulations 2019
Background: OFSI published a disclosure concerning three UK charities;Sahara Hands, Peculiar Peoples’ Palace Ministries, and Impact Planet,for failing to respond to repeated Requests for Information (RFIs). Despite being listed on the Charity Commission register with active contact details, the charities did not engage with OFSI.
Penalty: No monetary penalty was imposed. OFSI assessed the breaches as moderately severe and opted for disclosure under section 149(3) PACA.
Charity trustees must ensure they comply with RFIs and maintain accurate contact details. Non-response hinders OFSI’s ability to monitor compliance and will attract enforcement attention.
Svarog Shipping & Trading Company (April 2025)
Regime: Russia (Sanctions) (EU Exit) Regulations 2019
Background: Svarog, a UK-registered maritime fuel transportation company operating from Cyprus, failed to respond to an OFSI RFI by the statutory deadline without reasonable excuse. The request related to a wider investigation into transactions involving Sovcomflot, a designated entity.
Penalty: OFSI imposed a £5,000 penalty for breach of regulation 74(1)(a), which makes failure to respond to an RFI a criminal offence.
Timely engagement with OFSI is essential. Firms should maintain systems to monitor and respond to regulatory requests and proactively seek extensions if deadlines cannot be met.
Vanquis Bank Limited (September 2025)
Regime: Counter-Terrorism (Sanctions) (EU Exit) Regulations 2019
Background: Vanquis Bank failed to restrict access to a designated person’s account for eight days after designation, allowing withdrawals and transactions. OFSI had forewarned the bank of the impending designation, yet delays occurred due to resource reallocation following unrelated remediation work.
Penalty: No monetary penalty was imposed. OFSI categorised the breach as moderately severe and opted for disclosure.
Operational resilience is vital. Firms should have contingency plans to ensure swift action when designations occur, even during periods of internal disruption.
Colorcon Limited (September 2025)
Regime: Russia (Sanctions) (EU Exit) Regulations 2019
Background: Colorcon, a UK subsidiary of a global pharmaceutical supplier, operated a Moscow office and made 123 payments to employees and service providers whose accounts were held at designated Russian banks. OFSI concluded that payments totalling £128,277.72 were in breach. The company relied on its bank for sanctions screening and failed to comply with reporting requirements under a general licence.
Penalty: OFSI assessed the case as serious and imposed a penalty of £152,750 after applying a 35% discount for voluntary disclosure. The discount was reduced from 50% due to a four-month delay in reporting.
Firms must maintain comprehensive sanctions policies and ensure they cover all counterparties. Reliance on third parties for screening is insufficient. Prompt disclosure and compliance with licence reporting obligations are critical.
Key takeaways
These decisions show that OFSI expects more than technical compliance. It wants firms to demonstrate resilience and foresight. Delays caused by resource shortages or rushed exits were treated as governance failures, not process errors. Sanctions risk now belongs on the board agenda, supported by clear decision rights and tested playbooks.
Voluntary disclosure remains the strongest mitigant, but speed matters. OFSI rewarded immediate, candid reporting with full discounts. Late disclosure, even if detailed, lost elements of mitigation. The practical lesson is to escalate quickly, notify early, and refine later.
Two technical points stand out; licence compliance, and ownership and control. First, using a general licence without meeting its reporting obligations is itself a breach. Second, payments to subsidiaries of sanctioned banks were treated as direct violations. Screening must cover group structures and control relationships, not just names.
Finally, OFSI’s enforcement for ignoring information requests or failing to respond in time shows that engagement is a core duty. Responding to RFIs is not administrative, and lack of action will be sanctioned.
The bigger picture is clear. OFSI is using penalties and disclosures to drive cultural change. Firms that act fast, document decisions, and show proactive governance fare far better than those that rely on assumptions or delay action.
If you have any questions relating to the information discussed in this article, or any sanctions-related queries, please contact Paul Henty and Deen Taj.
Download PDF
