OFSI Publishes Annual Review 2024-25

On 15 October 2025, the Office of Financial Sanctions Implementation (OFSI) published, alongside guidance on who is subject to financial sanctions in the UK, its Annual Review for 2024-25, outlining key developments in its approach. 

Detailing efforts to improve compliance and strengthen enforcement, the annual review:

• Follows OFSI’s financial services sector threat assessment (see our previous blog, here: UK Publishes Financial Services Sector Threat Assessment for Financial Sanctions).
• Follows its recently closed public consultation on improving civil enforcement processes for financial sanctions (here). The consultation sought views on proposals to (among other points) change OFSI’s public case assessment guidance and penalty discounts for voluntary disclosure and co-operation; to introduce a settlement scheme for monetary penalty cases; to introduce indicative penalties for appropriate cases involving information, reporting, and licensing offences; and to amend OFSI’s statutory penalty maximums.
• Continues to emphasise its continued focus on a more proactive regulatory approach.

Overall, the annual review clearly demonstrates OFSI’s developing processes and enforcement focus. Its published penalties have clearly increased in frequency this year, often focusing on themes of inadequate understanding of sanctions; errors in implementing sanctions; inadequate systems and controls; and reporting issues. Both penalty quantity and quantum are doubtless likely to continue to increase.

Proactive enforcement and investigation

A key takeaway from the annual review is the ongoing move towards a more proactive enforcement model. In particular:

• OFSI outlines that it is not only acting on the breach reports that it receives, but is also actively generating its own caseload. In the 2024-25 period, 394 new suspected breach cases were recorded (with 214 closed), a volume that remains consistent with the 396 cases from the previous year. While just over half of these cases came from self-reporting, a substantial number (180) were generated from non-self-reported sources.
• OFSI had 240 active investigations as of April 2025. A substantial number (151) were again not from self-reported sources. In the 2024-25 period, 57 enforcement actions were taken, comprising a range of measures such as monetary penalties, warning letters, disclosures and referrals to various regulators.
• Financial services and legal services were noted as being the most affected by these actions. 

Licensing regime 

Changes to the licensing regime aim to clarify requirements and enhance how compliance is monitored. In the annual review, OFSI highlights:

• A series of legislative amendments designed to ensure licensing grounds are suitable for the types of applications seen in practice. Legislative amendments have expanded the grounds for licensing, with the creation of a new ‘Insolvency Services’ licensing ground to facilitate activity in relation to insolvency and restructuring related payments. Other changes include amending the Judicial Decisions licensing ground, to allow OFSI to license payments relating to both pre and post designation Court decisions.
• The replacement of General Licences with statutory exceptions. For example, the Required Payments Exception came into force in December 2024, resulting in the revocation of four administrative General Licences and consolidating previous processes into a single exception. Whilst this may reflect a broader strategy to put general permissions on a statutory footing, OFSI continues to issue new General Licences, such as the Arbitration Costs General Licence, to address specific industry needs or to cover gaps in existing permissions.
• Its new, dedicated 'Compliance Enforcement’ team, created to review, investigate and enforce licence breaches, indicating a greater emphasis on post-licence scrutiny. It is reported that this new function will allow for more direct action on insufficient reporting and has already reduced response times for licence related enforcement action. Investigations into inconsistencies have also already led to the identification of other sanctions breaches, and are seen as a method for detecting wider circumvention. The new team will likely focus on the main causes of licence breaches identified by OFSI, which include transactions after a licence has expired, the use of bank accounts not specifically authorised under a licence, and failures to meet reporting requirements.

Regulatory co-operation 

OFSI reports that regulatory co-operation has strengthened over the past year:

• The signing of the first Memorandum of Understanding (MoU) with the US Treasury (OFAC) in October 2024 was intended to bolster the collaborative relationship between the two agencies. OFSI believes that intelligence sharing agreements of this kind can lead to more co-ordinated UK/US investigations, increasing multi-jurisdictional risk for global firms.
• OFSI continues to work with UK law enforcement agencies including the National Crime Agency (NCA), HMRC and the police, on specific cases. In April 2025, the Crown Prosecution Service (CPS) and NCA secured the first convictions for breaches of Russian sanctions in the UK, when Dmitrii Ovsyannikov, a former Russian governor, and his brother Alexei Owsjanikow were convicted on multiple counts of breaching financial sanctions and money laundering offences.
• Effective June 2025, HM Treasury has achieved 'prescribed person' status  under the Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2025. This creates a formal and protected channel for receiving information on suspected breaches, including through whistleblowing, and provides employment protections for those who come forward.

Compliance guidance and sectoral expansion

The annual review also reports that the provision of compliance guidance was another area of focus for OFSI. This included the launch of 145 frequently asked questions in May 2024 and the publication of a series of sectoral threat assessment reports. After the initial financial services report in February 2025 (which we discussed here), additional assessments were completed for legal services, high-value dealers, art market participants, property and cryptoassets. This body of guidance sets a benchmark for compliance and suggests increased expectations regarding firms' implementation of sanctions.

New sectors have also been brought within the definition of ‘relevant firms’, including high-value dealers, art market participants, letting agents and insolvency practitioners. This expansion means sanctions compliance duties now extend beyond traditional financial services sectors.

Counter-terrorism

The review also highlights counter-terrorism sanctions and related enforcement, with:

• OFSI using its ‘autonomous domestic designation’ powers for the first time in order to target a suspected IRA financier in December 2024, an action which also marked the first use of such sanctions in Northern Ireland. These powers were used in co-ordination with other law enforcement agencies and were intended to prevent the UK financial system from being used for terrorist financing.
• On the enforcement side, 16 new breach cases were pursued under counter-terrorism regimes, leading to a total of 32 enforcement actions. These included the public disclosure of action against three ‘Non-Governmental Organisations’ for failing to respond to OFSI's requests for information, an action OFSI deemed a proportionate response to a moderately severe breach.