Sanctions enforcement action

OFSI's recent actions include significant fines and public disclosure notices against banks and financial services firms, highlighting the need for robust systems and controls.

OFSI expects financial institutions to self-disclose suspected breaches immediately. Delays can reduce penalty discounts and increase reputational risk. In the Colorcon case, a four-month delay in reporting led to a lower discount on the penalty.

Recent guidance and enforcement actions stress the importance of identifying entities owned or controlled by designated persons, including subsidiaries and complex structures. Failure to screen for indirect ownership is a common compliance gap.

Breaches often arise from improper maintenance of frozen assets or expired licences. Financial institutions must ensure that all transactions involving designated persons are properly licensed and reported, and that frozen assets are managed in line with OFSI requirements.

OFSI has expanded its guidance for the finance sector, including threat assessments, compliance notes and annual reviews. These resources provide practical steps for improving sanctions screening, reporting, and staff training.

Recent penalties include £152,750 against Colorcon, £300,000 against Markom Management and £465,000 against HSF Moscow. The FCA and OFSI are working together to ensure that regulated firms face both financial and reputational consequences for breaches.