UK Law and Practice Contributed by: John Binns, BCL Solicitors LLP
In order to have an impact on DPs, and in many cases the broader impact on the target country’s economy, the UK effectively relies on compliance measures by countless UK businesses aimed at ceasing engage - ment with, or freezing the assets of, their own custom - ers (and/or turning away potential customers). The Role of Regulated Firms Many of these businesses are regulated in some way, most notably the financial sector, whose sanc - tions compliance procedures are policed (along with many other aspects) by the Financial Conduct Author - ity. Professional bodies also play their part, notably in policing the compliance efforts of lawyers and accountants. Reports (submitted to OFSI and often also to the National Crime Agency under money laundering legis - lation) and licence applications from these businesses also play a significant part in sanctions enforcement, alerting the authorities to the location of relevant funds and economic resources, as well as potential breaches. OFSI (and, in due course, its trade sanctions coun - terpart, OTSI) then play what has hitherto been a relatively small part in enforcement against sanctions breaches, compared with the resource-intensive but relatively low-profile licensing function. Civil and Criminal Processes For appropriate cases, OFSI can impose monetary penalties on any person (individual or business) it con - siders responsible for breaching financial sanctions. Relatively uncommon so far, these penalties can be severe and also carry the risk of reputational damage from public censure. For trade sanctions involving goods, the seizure and potential forfeiture of improperly imported products are often the preferred enforcement route. The more serious breaches (or alleged breaches) of sanctions are criminally investigated by the NCA and prosecuted independently by the Crown Prosecution Service.
Proceeds (or alleged) breaches can also be subject to civil recovery processes under the Proceeds of Crime Act 2002 (POCA), which do not require a criminal con - viction. In theory, any law enforcement agency can drive these processes; however, in practice, the NCA would likely take the lead where assets are said to derive from a breach of sanctions. 2.2.2 Breaching Sanctions Breach of the prohibitions in sanctions regulations constitutes a criminal offence. Where the breach relates to financial sanctions, the maximum term of imprisonment is seven years; where it relates to trade sanctions, the maximum term is ten years. Unlimited fines can also be imposed. 2.2.3 Civil Enforcement Action In the last three years, OFSI has imposed monetary penalties against: • Hong Kong Wines and Spirits, in the sum of GBP30,000 (for running a competition for the ben - efit of a designated producer of Crimean wine) on 27 September 2022; • Integral Concierge Services Limited, in the sum of GBP15,000 (for sums received for property man - agement services provided to a DP) on 29 August 2024; • Herbert Smith Freehills CIS LLP (HSF Moscow), in the sum of GBP465,000 on 20 March 2025; and • Svarog Shipping and Trading Company Limited, in the sum of GBP5,000 (for failing to respond to an information requirement) on 11 April 2025. OFSI also made public statements, though without imposing monetary penalties, against: • Wise Payments Limited (for a GBP250 cash with - drawal by a DP) on 31 August 2023; and • three charities (which failed to respond to informa - tion requirements under counter-terrorism sanc - tions regulations) on 14 March 2025. Notably, despite headlines about the seriousness and importance of the sanctions regime, only the HSF Moscow penalty (imposed for payments made to sanctioned banks, ironically in the context of a
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