Syed Rahman assesses the key proposals
On 15 May 2025, the UK government published the outcome of its cross-government review into the implementation and enforcement of UK sanctions, which proposes to introduce reforms to the civil enforcement framework.
The government’s review calls for the introduction of a system that allows those suspected of breaching financial sanctions to reach early settlements, which is also a key feature of the US sanctions enforcement strategy. The aim is to “aid deterrence and ensure that enforcement action is delivered more efficiently and does not impose undue burdens on UK firms.”
The government has also said it will put forward an accelerated civil penalty process for “certain types” of financial sanctions offences. This would be done in an attempt to: (i) ensure “efficient and proportionate enforcement outcomes”, (ii) drive reporting compliance, (iii) free up resources for “the most complex, serious and deliberate” sanctions breaches and (iv) reduce the administrative burden on businesses.
The above proposals should offer more flexibility to the UK agencies responsible for the civil enforcement of sanctions. The Office of Financial Sanctions Implementation (OFSI), for example, is currently unable to offer settlements for breaches of financial sanctions. The proposed reforms will also lead to closer alignment with the UK agencies that lead on criminal enforcement, such as HM Revenue and Customs (HMRC), who already have the power to offer compound settlements for breaches of export controls in lieu of criminal prosecution.
The government also aims to publish a government-wide sanctions enforcement strategy to help businesses understand the consequences of non-compliance.
In addition, the policy paper outlines plans to enhance whistleblower protections by updating the Public Interest Disclosure (Prescribed Persons) Order 2014 - which qualifies reports to certain agencies as being eligible for whistleblower protections - to include disclosures made to “relevant government departments in relation to financial, transport and certain trade sanctions”. This proposal has now become law, as of today (26 June 2025). It is timely, given the continuing narrative within law enforcement of encouraging whistleblowing and a ‘speak up’ culture within corporates.
It is intended that all of the measures outlined in the government’s policy paper are to be implemented by April 2026.
