UK Planning Sanctions Enforcement Reform, Including Speedier Penalties

The U.K. wants to be able to impose “quicker and more impactful penalties,” multiple U.K. agencies said in a policy paper released May 15, including the Department for Business and Trade and the National Crime Agency. The paper was the result of a monthslong review of the country’s sanctions enforcement powers, and the U.K. said it plans to implement the conclusions of the review this year or in 2026.

“To give sanctions bite, there must be clear consequences for offenders,” the policy paper said. “That means equipping enforcement authorities with a range of enforcement tools, enabling them to take proportionate and robust action in response to breaches.”

The country said it’s planning to publish a “government-wide sanctions enforcement strategy” and previewed some early changes it will make to its penalty powers. It noted that the U.K.’s revenue and customs agency can issue fines, but “beyond that,” the U.K. “does not have powers to agree early settlements for sanctions cases.” It said the country should create an “early civil settlement scheme for breaches of financial sanctions,” adding that it will seek public comments on the idea.

“Quicker resolution of civil financial sanctions cases will aid deterrence and ensure that enforcement action is delivered more efficiently and does not impose undue burdens on UK firms,” the U.K. said.

The U.K. should also “fast-track” its sanctions penalties, the policy paper said, which will help deliver “more efficient and proportionate enforcement outcomes and drive compliance with reporting and licensing requirements.” It also will free up U.K. government resources to focus on more complex and “deliberate” violations while reducing the “administrative burden on industry.”

The country is also planning to publish more sanctions guidance and update existing guidance so that it’s “better organised, modern and more easily searchable.” It’s also considering merging the country’s two main sanctions lists, the U.K. Sanctions List and His Majesty's Treasury’s Consolidated List of asset freeze targets, into a “single list.” This will “aid industry in screening for designated persons, especially those with non-financial designations.”

Other initiatives will give industry more “clarity” on how companies are expected to determine the ownership and control of counterparties, the policy paper said. The agencies acknowledged that those efforts often involve “complex due diligence and legal costs.”

Companies also should also be able to more easily report suspected sanctions violations, the U.K. said, adding that it wants to “explore ways to clarify reporting requirements and channels, including the viability of a single reporting point for suspected sanctions breaches.”

The policy paper also listed several other steps the U.K. wants to take to “go further and deeper to improve sanctions enforcement” and implementation, including possibly creating a new “joint sanctions intelligence function.” It’s also considering introducing “sanctions end-use licensing controls for exports with high risk of sanctions diversion,” working with certain overseas “territories” to help them put in place civil sanctions enforcement powers, and “enhancing transport powers to restrict the movement of targeted aircraft.”

“Taken together, these steps will improve and facilitate compliance, increase the deterrent effect of enforcement, and invigorate our enforcement toolkit,” the policy paper said.