Sanctions and Export Control | UK Regulatory Outlook April 2025

OFSI publishes property and related services threat assessment report 

The Office of Financial Sanctions Implementation (OFSI) published its property and related services sectors threat assessment report, outlining the threat to sanctions compliance in the property sector and related services (including UK property management firms, and relevant actors across the sector such as estate agents, letting agents, property managers, investors and developers). The report aims to assist property and related services firms with prioritisation as part of a risk-based approach to compliance by providing information on suspected sanctions breaches. 

In particular, OFSI notes that since February 2022, just over 1% of all suspected breach reports were reported by property and related services firms. However, 7% of all suspected breaches reported by other firms involved the property sector. The report notes that this discrepancy indicates under-reporting by firms within the sector. OFSI emphasises that it values self-disclosure and timely reporting of suspected breaches; therefore, firms should take care to ensure they consider whether a report needs to be made when they become aware of suspected breaches. 

The report also provides some helpful guidance on cross-sector "red flags" indicative of potential sanctions evasion. Property and related services firms are encouraged to review the report alongside its Frequently Asked Questions (FAQs) which provide further guidance and technical information on financial sanctions.  

If you would like to discuss any of the issues raised in the report, please get in touch with your usual Osborne Clarke contacts or our experts below. 

First criminal prosecution for Russia sanctions breaches 

The National Crime Agency (NCA) announced the first criminal convictions it has secured for breaches of the Russia Regulations. Dmitrii Ovsiannikov, a former Russian government minister and his brother, Alexei Ovsiannikov, were found guilty of breaching UK financial sanctions under the Russia (Sanctions) (EU Exit) Regulations (Russia regulations).  

Dmitrii Ovsiannikov was sentenced to 40 months' imprisonment, after being found guilty of knowingly breaching sanctions placed on him and money laundering offences. His brother, Alexei Ovsiannikov, was handed a 15 month suspended sentence, having also found guilty of circumventing sanctions regulations, through making economic resources available to his brother, a designated person.

Stephen Doughty, Foreign, Commonwealth and Development Office sanctions minister said: “When this government came to office, we made clear we were committed to making sure sanctions were used most effectively – and crucially, robustly enforced.". However, while the case illustrates the government's commitment to enforcement of UK sanctions, the judge's observations in the judgment raise questions about whether this type of breach warrants prosecution by the Crown Prosecution Service (CPS).  

The judge noted that this case was "a country mile from the kinds of structures often seen in international fraud claims," characterising Dmitrii's actions as "naïve", "unsophisticated" and "driven by overoptimism," with no attempts to conceal his behaviour. Furthermore, Mr Ovsiannikov has successfully challenged his EU designation and challenging his own UK designation at the time the breaches occurred, with the judge accepting that he was likely to succeed. This suggests the breach was technical and unlikely to further the UK's sanctions regime. 

Indeed, the judge stressed that he imposed the "lowest appropriate sentence" available to him and considered the most aggravating feature of the offence to have been Mr Ovsiannikov's involvement of his wife and brother – exposing them to criminal sanction as well. In particular, the judge expressed scepticism about the CPS' argument that it was important to send "a strong message to [the 3,600] designated individuals, to encourage compliance with the regime and deter breaches" noting that the "danger of over-emphasis must be guarded against".   

However, the fact that the proceedings were brought – and were successful – only serves to highlight the increased multi-agency focus on UK sanctions enforcement and the government's commitment to using the full range of enforcement tools, including criminal prosecution and indicates that there is a risk of prosecution in all circumstances. It underscores the importance of thorough "know your customer" and due diligence checks to identify potential sanctions-related risks, even when a UK designated person is not directly involved in a transaction. 

For further information, see the CPS press release and judgment.  

OFSI key takeaways for industry on HSF Moscow Penalty 

OFSI published a blog post detailing three key lessons that businesses should take away from the monetary penalty issued against HSF Moscow for breaches of Russia financial sanctions in March 2025 (read more in our previous Regulatory Outlook).  

1. Understanding your exposure to sanctions risks: OFSI reminds firms to ensure they understand their exposure to sanctions risks and to take appropriate action to address them. In particular, parent companies with subsidiaries in areas that pose a heightened sanctions risk should also provide suitable advice and assurance to their subsidiaries.
2. Adhere to organisational sanctions policies and processes: Firms should follow relevant sanctions screening and due diligence measures in place within their organisation. OFSI emphasises that failure to comply with appropriate sanctions policies and procedures is likely to negate the mitigating factor of having them in place.
3. Fully consider ownership and control: Firms must carefully consider ownership and control, beyond whether an entity is directly subject to sanctions. OFSI states that it regards a failure to thoroughly consider and accurately identify clear ownership more negatively than an incorrect assessment of control made in good faith.