Sanctions and export control | UK Regulatory Outlook July 2025

OFSI consultation on financial sanctions enforcement policies and processes 

OFSI has launched a consultation on proposed updates to its financial sanctions enforcement policies and processes. 

It has identified improvements that could be made to its enforcement processes that would facilitate more efficient case resolution, thereby enhancing the delivery of public enforcement actions and reducing the burden on OFSI and the firms or individuals involved. 

The consultation is seeking views on: 

• changes to OFSI’s public case assessment guidance to provide more guidance and transparency and reducing the maximum penalty discounts for voluntary disclosure and co-operation to 30% from 50% (Chapter 3);
• the introduction of a settlement scheme for monetary penalty cases (Chapter 4);
• the introduction of an Early Account Scheme that would enable subjects of a relevant OFSI enforcement investigation to provide a complete factual account of the matters under investigation (Chapter 5);
• the introduction of a streamlined process with indicative penalties for certain cases involving information, reporting and licensing offences (Chapter 6); and
• changes to OFSI’s statutory penalty maximums under sections 146(3)(a) and (4) of the Policing and Crime Act 2017, from £1,000,000 to £2,000,000 in cases where the breach or failure does not relate to particular funds or economic resources, or where the permitted maximum based on a specified percentage of the estimated value of the funds or economic  resources at  section 146(3)(b) (currently 50%) was less than £2,000,000. OFSI also proposes a change to the specified percentage of the estimated value of the funds or resources at section 146(3)(b) to 100%. (Chapter 7). 

The consultation proposes changes only to cases involving OFSI’s civil enforcement powers in connection with breaches of financial sanctions (including Russia-related designated person asset reporting) and the UK Maritime Services Ban and Oil Price Cap exception (Oil Price Cap).  

The consultation closes on 13 October 2025. 

OFSI publishes cryptoassets threat assessment report  

OFSI published its cryptoassets threat assessment report, which covers threats to financial sanctions compliance of relevance to UK cryptoasset firms.  

This is the fifth and final report in a series of sector-specific reports published by the OFSI identifying issues with sanctions compliance and red flags which should trigger enhanced due diligence and, where relevant, reports to OFSI.  

The assessment identifies common compliance vulnerabilities, providing examples of typologies that firms should be aware of for sanctions compliance and illustrating situations that constitute direct or indirect exposure to designated persons through cryptoassets. It urges cryptoasset firms to monitor for any new addresses linked to designated persons and to report suspected breaches to OFSI. The report emphasises that UK firms should report suspicious transaction chains involving the management of frozen funds or economic resources to OFSI as soon as they are discovered. 

The report also identifies several trends specific to cryptoasset firms as posing a threat to UK financial sanctions, including exposure to the designated Russian exchange Garantex, the risk of being targeted by hackers and IT workers operating on behalf of the North Korean government, and facilitating transfers made to Iranian cryptoasset firms with suspected links to designated persons.  

The threat assessment notes that reporting in the sector has been inconsistent and there have been instances of significant delays in identifying suspected breaches and making reports to OFSI. To mitigate against these issues, the report includes a set of best-practice recommendations when reporting suspected breaches to OFSI, which UK cryptoasset firms and firms interacting with cryptoassets should consider.  

See also our previous updates on the financial services, property and related services and art market participants and high value dealers threat assessment reports. Our Insight explains the reporting obligations affecting firms in the property sector.  

If you have any questions or concerns about the threat assessment or would like to discuss your new reporting obligations, please get in touch with your usual Osborne Clarke contacts or our experts below.