UK Sanctions Regime: Key Updates for Exporters and Compliance Professionals

By Neil Tyson ACFS, Owner and Founder at Rightway Compliance

The UK’s sanctions landscape is undergoing significant transformation. From the consolidation of designation lists to new sector-specific guidance on evasion tactics, compliance teams face a wave of regulatory change that demands attention before January 2026. This article summarises the key developments and what they mean for your organisation.

The Move to a Single UK Sanctions List

Perhaps the most significant administrative change in recent years, the UK government has confirmed that from 28 January 2026, the UK Sanctions List (UKSL) will become the sole source of UK sanctions designations. The Office of Financial Sanctions Implementation (OFSI) Consolidated List will close and no longer be updated from that date.

Why This Matters

Currently, UK designations appear across two lists:

  • The UK Sanctions List (UKSL) – published by the Foreign, Commonwealth & Development Office (FCDO), covering all sanctions designations made under the Sanctions and Anti-Money Laundering Act 2018 (SAMLA)
  • The OFSI Consolidated List – published by HM Treasury’s Office of Financial Sanctions Implementation, covering those subject specifically to financial sanctions (asset freezes)

Maintaining two separate lists has created operational complexity, with different identifiers and independent update cycles requiring firms to consult both to meet compliance obligations.

What You Need to Do

Systems relying on OFSI Group ID: Any screening systems that use the ‘OFSI Group ID’ identifier will need updating to use the UKSL’s ‘Unique ID’ format. Historic Group IDs for persons designated before 28 January 2026 will remain valid for licence applications and reporting.

Third-party screening providers: If you use external screening services, confirm with your supplier that they are preparing for this change and understand their transition timescales.

Policies and procedures: Review and update your AML policies, sanctions procedures, and relevant checklists to reflect the change to a single list.

Don’t wait: The government recommends switching to the UKSL as your primary data source now. The current UKSL is live and available in multiple formats.

FCDO/OFSI Webinar – 17 December 2025

The FCDO and OFSI are holding a public webinar on Wednesday 17 December 2025, 11:00am – 12:00pm, to explain the transition and anticipated improvements to the government’s search tool. If you haven’t already registered, this is a valuable opportunity to hear directly from the regulators.

New Sanctions Enforcement Action Page

On 3 November 2025, the UK government launched a consolidated Sanctions Enforcement Action page . This single landing page brings together enforcement outputs and lessons for industry from:

  • Office of Financial Sanctions Implementation (OFSI)
  • Office of Trade Sanctions Implementation (OTSI)
  • HM Revenue & Customs (HMRC)
  • National Crime Agency (NCA)
  • Foreign, Commonwealth & Development Office (FCDO)

The page includes published monetary penalties, prosecution outcomes, disclosure notices, and – critically – case studies highlighting compliance failures and the lessons industry should draw from them.

This initiative reflects the broader recommendations from the Cross-Government Review of Sanctions Implementation and Enforcement published in May 2025, which committed to clearer, more accessible guidance and a more coordinated approach to enforcement.

OTSI Guidance for Freight and Shipping: A Higher Bar for Due Diligence

Also published on 3 November 2025, the Office of Trade Sanctions Implementation (OTSI) issued comprehensive guidance specifically for the freight and shipping sector: Countering Russian Sanctions Evasion: Guidance for the Freight and Shipping Sector.

Who Should Read This?

The guidance targets:

  • Freight forwarders
  • Carriers and hauliers
  • Customs intermediaries
  • Postal and express operators
  • Shipping companies

However, the principles apply more broadly to anyone in the supply chain that may be subject to sanctions compliance.

Key Themes

Heightened due diligence expectations: The guidance makes clear that reliance on sanctions screening databases alone is no longer sufficient. Firms must actively reconcile HS codes, goods descriptions, weights, dimensions, labels, and serial numbers – and where risk factors exist, physically inspect shipments.

Red flags to watch for:

  • Misclassification under HS codes (tariff codes)
  • Vague goods descriptions
  • “Blind shipment” requests concealing consignees or suppliers
  • “Switch” Bill of Lading instructions
  • Small-parcel channel abuse
  • Third-country trans-shipment patterns
  • Last-minute changes to parties or routes
  • Unusual or third-party payment arrangements

Contractual protections: The guidance recommends incorporating “no re-export to Russia” clauses into contracts, and sanctions-specific Know Your Customer (KYC) requirements.

Reporting obligations: Any suspected breach should be reported immediately – to HMRC for goods crossing the UK border, or to OTSI for services and other non-border matters.

While the guidance focuses on Russia, OTSI notes that much of the content applies equally to other sanctions regimes including Iran, Belarus, and North Korea.

OTSI’s First Year: The Annual Review

On 4 December 2025, OTSI published its first annual review covering October 2024 to October 2025. Key statistics:

  • 60 licence applications received (vast majority relating to professional and business services under Russia sanctions)
  • 12 licences granted in full or part
  • 3 licences refused
  • 146 breach reports received
  • Average processing time: 82 working days per application
  • No civil monetary penalties imposed to date

OTSI’s priorities for 2026 include:

  • Expanding its licensing remit to cover all export sanctions licensing (except strategic export controls, which remain with the Export Control Joint Unit)
  • More proactive enforcement activity
  • Enhanced business engagement, particularly outside London, through its trade sanctions roadshow

OFSI Sector-Specific Threat Assessments

Throughout 2025, OFSI has published a series of sector-specific threat assessments under the Economic Crime Plan 2. The first, covering financial services, was published in February 2025. Additional assessments have since covered:

  • Legal services
  • Property and related services
  • High value dealers and art market participants
  • Cryptoassets

Key Findings from the Financial Services Assessment

Underreporting remains a concern: OFSI assessed that it is “likely” (55-75% probability) that some UK financial services firms have not self-disclosed all suspected breaches.

Common compliance weaknesses:

  • Improper maintenance of frozen assets (e.g., automatic contract renewals triggering debits from designated persons’ accounts)
  • Licence condition breaches (transactions after expiry, use of non-specified accounts, failure to meet reporting requirements)
  • Inaccurate ownership assessments (failures to identify subsidiaries owned by designated persons)

Intermediary jurisdictions: Over 25% of suspected breach reports reference intermediary jurisdictions, with British Virgin Islands, Cyprus, Switzerland, UAE, Guernsey, Luxembourg, Austria, and Turkey featuring most frequently.

Enabler activity: OFSI highlights the growing risk of “enablers” – individuals or entities (often with pre-existing relationships to designated persons) who facilitate payments for lifestyle maintenance, claim ownership of frozen assets, or launder funds on behalf of sanctioned individuals.

Proliferation Financing: The Regulatory Spotlight Intensifies

For organisations in sectors with dual-use goods exposure – including exporters, manufacturers, and their financiers – proliferation financing (PF) risk assessment obligations are receiving increased regulatory attention.

Under the UK Money Laundering Regulations (Regulation 18A), firms are required to identify and assess their proliferation financing risks. The FATF’s updated guidance on PF risk assessment and mitigation continues to shape expectations, with a current consultation on Complex Proliferation Financing and Sanctions Evasion Schemes informing future guidance.

Key points for compliance teams:

  • PF risk assessment can be integrated into existing sanctions/AML programmes – standalone processes are not required
  • Geographic, customer/counterparty, and transaction indicators should inform your risk assessment
  • Countries of proliferation concern and jurisdictions with weak export controls warrant enhanced scrutiny
  • The scope extends beyond DPRK and Iran to any UN-targeted proliferation financing activity

Other Notable Developments

New UK Starter Guide to Sanctions: Published 22 September 2025, this accessible resource provides foundational guidance for businesses new to sanctions compliance.

Syria Guidance: Following recent developments, the FCDO published new guidance (2 December 2025) on sanctions and counter-terrorism legislation applicable to Syria, aimed at businesses and NGOs.

First Criminal Convictions: In April 2025, the NCA secured the first criminal convictions for breaching UK financial sanctions related to Russia.

NCA Operation Destabilise: In November 2025, the NCA exposed a multi-billion dollar money laundering network facilitating Russian sanctions evasion, resulting in 84 arrests and significant asset seizures.

What This Means for Your Organisation

The message from UK regulators is clear: sanctions compliance requires continuous vigilance, proactive risk assessment, and robust due diligence that goes beyond list screening.

Key actions to consider:

  1. Prepare for the single list transition – update systems, policies, and procedures before 28 January 2026
  2. Review your screening approach – ensure it captures ownership and control, not just name matches
  3. Enhance supply chain due diligence – particularly if you handle goods that could be diverted to sanctioned destinations
  4. Update your risk assessment – incorporate proliferation financing, intermediary jurisdiction risks, and sector-specific threats
  5. Train your people – frontline staff need to recognise red flags and understand reporting obligations
  6. Test your controls – consider independent gap analysis to identify vulnerabilities before the regulator does

How Rightway Compliance Can Help

Navigating the evolving UK sanctions landscape requires specialist knowledge and practical experience. At Rightway Compliance, we offer:

Sanctions Training – Tailored programmes covering trade sanctions, proliferation financing, and practical compliance for export-focused businesses. Our training equips your team to identify red flags, understand reporting obligations, and implement effective controls.

Explore our online sanctions training programme

An overview of the UK sanctions regime and best practice guidance on how to meet legal, regulatory and ethical requirements.

Enhanced Due Diligence – When standard screening isn’t enough, our enhanced due diligence service helps you understand who you’re really dealing with. We specialise in:

  • Beneficial ownership identification – Unravelling complex corporate structures, multi-layered holding arrangements, and nominee relationships to identify the individuals who ultimately own or control an entity
  • Trust structures – Analysing trust arrangements to identify settlors, trustees, beneficiaries, and protectors, particularly where these may be obscured across multiple jurisdictions
  • Intermediary jurisdiction exposure – Assessing connections to higher-risk jurisdictions frequently associated with sanctions evasion, including those highlighted in OFSI’s threat assessments

Whether you’re onboarding a new customer, reviewing an existing relationship, or responding to a transaction alert, we provide the investigative depth your compliance team needs.

Risk Assessment Services – Effective sanctions compliance starts with understanding your exposure. We help organisations:

  • Review existing risk assessments – Independent evaluation of your current sanctions and proliferation financing risk assessment against regulatory expectations, identifying gaps and areas for enhancement

  • Develop new risk assessments – Working with you to build a comprehensive, documented risk assessment that reflects your customer base, products and services, delivery channels, and geographic footprint

  • Align with regulatory guidance – Ensuring your assessment incorporates the latest sector-specific threats identified by OFSI, OTSI, and the National Risk Assessment

A robust, up-to-date risk assessment is the foundation of defensible compliance – and increasingly, it’s what regulators expect to see.

Independent Audits and Gap Analysis – We assess your existing sanctions controls against current regulatory expectations, identify gaps, and provide practical recommendations for enhancement.

Policy and Procedure Reviews – Ensuring your documentation reflects the latest guidance and regulatory requirements.

Whether you’re seeking to strengthen your compliance framework or need bespoke training for your team, we can help. Please get in touch.

About the Author: Neil Tyson ACFS, is Owner & Principal Consultant at Rightway Compliance, with over 30 years of experience in fraud investigation, AML compliance, and player protection across regulated sectors including gambling, financial services, and public sector organisations. He previously led national investigation strategy at the Legal Services Commission and held senior roles at FTSE 100 companies including Centrica plc.

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