Sanctions and export control | UK Regulatory Outlook July 2026

OFSI publishes insights from consultation on the ownership and control test 

The Office of Financial Sanctions Implementation (OFSI) has published a summary of responses to its call for evidence on the ownership and control test in UK financial sanctions regulations, which closed on 20 April 2026.

The call for evidence asked stakeholders to share feedback on the "hypothetical control test" in financial sanctions legislation. Respondents reported that: 

• issues on the application of the test arise most often under the Russia regime and in cases involving state-linked entities, politically connected individuals, and trusts; 
• assessments made on limited information result in cost increases, involving enhanced due diligence, engaging external legal advice, and delaying or escalating business decisions for senior review; 
• existing tools and legal concepts relevant to control assessments are not reliable for implementing the test, but can be helpful for understanding the nature of control. 

OFSI states that the insights provided have enhanced its understanding of how frequently firms encounter hypothetical control scenarios and the impact on their business operations. The responses will also help inform the government's ongoing work and support potential next steps. This remains a policy area under active review. 

OFSI reminds firms that they are still required to assess ownership and control based on existing UK financial sanctions guidance.

UK and US publish comparative review of economic sanctions authorities 

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) and OFSI have published joint guidance comparing the key features of their economic sanctions regimes to help the private sector better understand obligations under both systems.

The guidance covers terminology and sanctions types under both regimes, and focuses on topics including sanctions lists, available licences, recordkeeping and reporting requirements. It notes where there are important differences between the regimes, which include: 

• Reporting requirements: any US person holding, unblocking, or transferring blocked property must submit the relevant reports to OFAC within ten business days. Under the UK regime, certain transactions and activities under the regime-specific UK regulations must be reported to OFSI. 
• Statute of limitations: OFAC may bring a civil enforcement action for violations of sanctions prohibitions within ten years of the latest date of violation. There is no statute of limitations under UK sanctions law. 
• Voluntary disclosure policy: OFSI and OFAC consider voluntary disclosures of apparent sanctions violations to be a mitigating factor. To encourage self-disclosure, in cases involving a qualifying voluntary self-disclosure where a civil monetary penalty is warranted, OFAC may apply up to a 50% reduction to the base amount of a proposed civil penalty. OFSI may apply up to a 30% reduction to the final monetary penalty amount. 
• Liability standard: OFAC applies a strict liability legal standard for sanctions violations, meaning that a person may be held liable even if they did not have knowledge that they were engaging in a prohibited transaction. OFSI applies a strict liability legal standard only to sanctions breaches that occurred after 15 June 2022. 
• Blocking and freezing: OFSI and OFAC sanction entities where a designated person owns more than 50% of that entity's shares. OFAC's "50 Percent Rule" applies to property interests owned individually or in the aggregate by one or more blocked persons. OFSI's 50% requirement applies to both shares and voting rights in the entity, calculated on an individual basis. 

See OFSI's blog for more on the OFSI-OFAC partnership. 

HMRC publishes technical notes for 2025 to 2026 sanctions enforcement activity 

HM Revenue & Customs (HMRC) has published supplementary technical notes providing information on sanctions enforcement activities undertaken and outcomes achieved in the 2025 to 2026 financial year, previously published as part of the Strategic Export Controls Annual Report. 

HMRC continued to work with Border Force and UK prosecution authorities to undertake a wide range of enforcement activity through 2025 to 2026, including:

• 58 seizures of sanctioned goods, where goods destined for import or export were found to be in breach of sanctions; 
• one compound settlement of £1,160,725.76 issued by HMRC for a breach of the Russia regulations; 
• 18 HMRC warning letters issued as a result of voluntary disclosures; 
• three positive charging decisions by the Crown Prosecution Service in respect of two cases currently awaiting trial. 

HMRC also received 44 referrals from the Office of Trade Sanctions Implementation in 2025 to 2026. Of these, 21 are under review, 13 were used to support existing HMRC investigations, and no further action was taken on ten cases (due to insufficient evidence or the cases falling below the criminal threshold). 

UK strategic export controls annual report 2025 

The government has published the UK strategic export controls annual report 2025, covering updates on legislation, UK and international policy developments, compliance and enforcement. The report also details ongoing work to modernise the Export Control Joint Unit (ECJU). 

Throughout 2025, the ECJU has made progress in transitioning away from the legacy SPIRE platform to LITE, its new online digital service for export licensing. Looking ahead to 2026, the ECJU will continue to develop additional licence types and further improve existing services on LITE. Additional development is also planned to enable LITE to produce new management information data, which is critical to supporting the ECJU in making operational improvements and reducing processing times. 

UK issues dual-use goods open general export licence 

The UK has issued a new open general export licence for listed dual-use goods. The licence permits the export of a wide range of dual-use items to a variety of destinations, including EU member states and the US. The licence entered into force on 25 June 2026. 

Exporters must register via SPIRE before using the licence and enter their unique licence reference into the Customs Declarations System for relevant exports. 

See the ECJU’s related notice to exporters. 

OFSI general licences and FAQs 

OFSI has issued the following: 

• FAQ 196, which explains the amendments made to General Licence INT/2025/8031092 (see below).
• FAQs 197-202 on basic needs allowance licences, which permit designated persons to access a capped monthly sum from frozen funds for essential living expenses.

OFSI has amended the following: 

• General Licence INT/2025/5787748, which permits payments to arbitration associations and arbitrators to cover fees and expenses for their arbitration services, has been amended to introduce a new monthly reporting requirement. The amendment requires individuals to report any payments received under this licence during that month with specified details and supporting evidence. It came into effect on 28 March 2025 and is of indefinite duration.
•  General Licence INT/2025/6641960, which permits non-designated persons who have made investments through designated brokers to transfer their funds to a non-designated broker. The general licence applies to transfers which would be prohibited by UK sanctions on Russia and Belarus and where the only designated party involved is the designated broker. The licence has been extended and now expires on 16 July 2027.
• General Licence INT/2026/9491628, which permits insolvency-related payments and activities connected with the Prince Group and their subsidiaries, subject to conditions, has been amended to include a new definition of "permitted insolvency activities". The licence took effect from 14 April 2026 and expires on 13 April 2031. 
• General Licence INT/2025/8031092, which permits the continuation of business operations with Lukoil International entities, has been amended to remove the restriction set out in paragraph 4.2, which required funds made available for the benefit of Lukoil International GmbH or an international subsidiary must be paid into a frozen account. The licence took effect from 27 November 2025 and expires on 25 August 2026.