The UK's Office of Financial Sanctions Implementation (OFSI) has confirmed it is "increasingly looking" to take enforcement action in relation to Iran sanctions breaches, following the UK's 'snapback' of sanctions against Iranian individuals and companies since September 2025. As reported by The Financial Times, OFSI Director Giles Thomson stated this represents a significant shift from the office's traditional focus on Russia-related enforcement. The expansion comes as OFSI has grown from approximately 30 to 140 staff since the invasion of Ukraine, with enforcement infrastructure and institutional confidence now being applied across the broader sanctions landscape. OFSI has imposed its first financial penalty on a non-UK entity under its new settlement scheme, with Apple Distribution International (ADI) fined for making payments to a Russian app developer owned by a designated person, despite the substantive conduct occurring outside the UK.
The UK government is set to double the civil monetary penalty regime from the higher of £1 million or 50% of breach value, to the higher of £2 million or 100% of breach value. According to Thomson, this change is expected "in the next few months" and would particularly impact cases involving cross-border flows of money, where apparently minor technical procedural breaches can have substantial sums attached. The new strategy formalizes OFSI's shift from a reactive to proactive posture, with published KPIs including a commitment that 90% of new enforcement investigations will be submitted for decision within 18 months of commencement. Since 2021, OFSI has progressed over 1,400 enforcement cases, issued 18 public enforcement decisions and imposed over £22 million in monetary penalties.
OFSI has imposed 'most serious' penalties in recent cases, including a £1,000,920.59 penalty on SGTL for circumventing sanctions through alternative payment routes. The case involved SGTL exploring alternative routes to receive payment from Ural Airlines after experiencing sanctions-related payment blocks at its UK bank, despite repeated red flags from the bank. OFSI noted the seven-month duration of the economic resource breach and the fact that at the time of breaches, SGTL "lacked competent senior oversight of sanctions." In another case, ADI was fined for making payments to a Russian app developer owned by a designated person, with OFSI determining that ADI's failure to request ownership information "very likely contributed to the breach payments occurring." The settlement scheme allows subjects to receive discounts to penalties in exchange for waiver of the right to appeal, marking a significant expansion of enforcement reach.
OFSI and the US Office of Foreign Assets Control (OFAC) have deepened their partnership through a formal Memorandum of Understanding (MoU) and regular strategic exchanges. Following their latest in-person strategic exchange in London in January 2026, both authorities identified several specific areas for future collaboration, including evaluating parallel mechanisms to rapidly increase sanctions pressure and harnessing lessons from novel restrictions developed in response to Russia's invasion of Ukraine. Both authorities discussed the use of artificial intelligence to support sanctions functions, with expectations that emerging technologies will "automate routine tasks or support information analysis to ultimately lead to improved decision-making." The partnership has produced additional joint guidance, including The U.S. and UK Economic Sanctions Authorities: A Comparative Overview, which compares key aspects of US and UK sanctions regimes.
The intensified UK sanctions enforcement represents a step-change in the sanctions risk landscape, with businesses now facing expanded enforcement ambitions beyond Russia and materially increased penalty exposure. As reported by Thomson, the enforcement infrastructure and institutional confidence developed through Russia-case investigation and enforcement will now likely be applied across the broader sanctions landscape. The developments confirm that new technologies will reshape sanctions evasion while the rapid evolution of crypto assets and a more fragmented financial services industry will present new challenges to compliance systems. HMRC has demonstrated that export control enforcement carries equivalent teeth, with the role of HMRC in enforcing export controls under the Russia Regulations demonstrating the breadth of enforcement firms must now navigate, extending well beyond financial services to exporters, manufacturers, logistics providers and trading companies with any touchpoints to sanctioned jurisdictions.
