UK sanctions regime
This guide explains what the UK sanctions regime means for solicitors. It sets out the criminal offences, how to assess sanctions risk and what to consider before acting for a client on the sanctions lists.
UK sanctions regime
UK sanctions are restrictive measures implemented by the UK to fulfil a range of purposes, including:
- complying with United Nations (UN) and other international obligations
- supporting foreign policy and national security objectives
- maintaining international peace and security
- preventing terrorism
The UK imposes a range of different types of sanctions, including:
- financial sanctions
- director disqualification sanctions
- trade sanctions (including arms embargoes and other trade restrictions)
- aircraft and shipping sanctions (known as transport sanctions)
- immigration sanctions (known as travel bans)
The most relevant to solicitors, and the main focus of this guide, are financial sanctions.
However, other types of sanctions (in particular, trade sanctions) can also be relevant depending on the nature of your work.
The UK sanctions regime can impose restrictions where the UK government has:
- imposed sanctions unilaterally, or
- implemented sanctions imposed by the UN
The Sanctions and Anti-Money Laundering Act 2018 (SAMLA) is the main legal basis for the UK to impose, update and lift sanctions.
SAMLA creates the statutory framework under which sanctions regulations are issued.
Specific restrictions are generally set out in regulations made under SAMLA.
It is common to refer to sanctions ‘regimes’, which are collections of sanctions measures put in place for a particular set of purposes.
Regimes can be either:
- geographic – relating to a particular country, such as Russia
- thematic – relating to a particular issue, such as corruption or terrorism
The Russia regime, for example, is mainly comprised of measures set out in the Russian (Sanctions) (EU Exit) Regulations 2019 (as amended), which are regulations made under SAMLA.
The UK government issues statutory guidance providing a high-level summary of the measures imposed under each regime.
Check the list of regimes and main statutory guidance for each one on the GOV.UK website.
Some types of sanctions measures apply through other legislation, such as the:
These are not discussed in detail in this guide, given the focus on financial sanctions.
If you are considering or advising on particular sanctions regimes (and in particular on trade sanctions), be aware you may need to have regard to legislation other than SAMLA and its implementing regulations.
Sanctions regulations can impose different types of restrictions on dealing with specified individuals or entities. Under the legislation, they’re referred to as “designated persons”.
People can be designated for different purposes – for example, as subject to asset freeze sanctions, director disqualification sanctions, trust services sanctions and so on.
One of the most common and most significant types of sanctions is an ‘asset freeze’.
The sanctions regime imposes extensive restrictions on dealing with designated persons who are subject to an asset freeze.
The law restricts you from:
- making funds or economic resources available to or for the benefit of persons who are subject to an asset freeze
- dealing with their funds or economic resources
This restricts making even legitimate payments to, or receiving payments from, those persons, as explained further below.
In February 2024, the UK government published its first sanctions strategy.
The strategy sets out how sanctions are used as a foreign and security policy tool.
Criminal offences under the sanctions regime
Asset freeze sanctions generally prohibit:
- dealing with the funds of designated persons
- dealing with the economic resources of designated persons
- making funds or economic resources available, directly or indirectly, to or for the benefit of designated persons
Breach of these restrictions, with knowledge or reasonable grounds to suspect that you are dealing with a designated person’s funds or economic resources, is a criminal offence.
It is also a criminal offence to intentionally participate in activities, knowing that their object or effect would, directly or indirectly:
- circumvent these restrictions, or
- enable or facilitate the contravention of any of the above restrictions
You can check if an individual or entity has been designated for asset freeze purposes by checking the consolidated list of designated persons.
However, it is important to recognise these restrictions apply not only to the listed individuals and entities, but also companies which are “owned or controlled”, within the meaning of the sanctions legislation, by them (see section 6).
Acting for a client who is on the sanctions list, or affected by an asset freeze because they are owned or controlled by a listed person, is discussed at section 7.
As an alternative to referring a matter for criminal investigation and prosecution, OFSI (see section 10) can impose civil monetary penalties for breach of financial sanctions.
These penalties can be imposed on a ‘strict liability’ basis.
For example, if you deal with a designated person’s funds, even if you did not know or have reasonable grounds to suspect that you were doing so, a penalty can be imposed.
However, in assessing any breach, OFSI will take into account a person’s level of actual and expected knowledge of financial sanctions, considering the kind of work they do and their exposure to financial sanctions risk.
OFSI has stated it expects regulated professionals to meet regulatory and professional standards, and that any failure to do so may be an aggravating factor.
Doing a sanctions risk assessment
The sanctions legislation does not prescribe how compliance with sanctions must be achieved, only that it must be.
This contrasts with the anti-money laundering (AML) regime where, for firms who conduct AML-regulated activities, a risk assessment must be carried out and address certain specified factors.
While it is not compulsory to have a sanctions risk assessment in place, the Solicitors Regulation Authority (SRA) recommends it as good practice for all firms.
A sanctions risk assessment is also a helpful way to consider what sanctions risk you may be subject to and what controls would be relevant to mitigate that risk.
The SRA has published guidance on conducting a sanctions practice-wide risk assessment.
You should bear in mind the following points when carrying out a sanctions risk assessment:
- there would be risks associated with categorising the clients that may need to be checked by their country of residence or, in the case of companies, their nationality
- UK nationals and UK residents can be on the sanctions lists, so you may still be at risk even if you only act for ‘local’ clients
- the regimes list can help you assess risk, but it may not be immediately clear that a person or entity is connected to a relevant regime
- you cannot limit your sanctions risk assessment to the work regulated under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs 2017)
- examples of unregulated work that the sanctions regime may affect include:
- payment of personal injuries settlements
- property settlements following a divorce
Any receipt of fees from or for the benefit of any person who is subject to an asset freeze would also engage the sanctions – irrespective of the type of work undertaken.
This would include receiving legal aid payments for the benefit of a person on the list.
This can be licensed (see section 8) but does underline that sanctions risk assessments should be limited to MLR-regulated work.
Read more about AML risk assessments.
Checking clients against sanctions lists
Checking whether particular persons appear on the sanctions lists is known as ‘sanctions screening’.
You may apply a risk-based approach to setting up a system that checks clients against the sanctions lists.
The SRA's guidance explains that, to make sure you are complying with the sanctions regime, you should understand:
- who your clients are
- who they are owned/controlled by, and
- potentially, the counter-parties and any third parties providing funding
Counter-parties and third parties present a risk because if they are designated persons, or are owned or controlled by designated persons, the funds they introduce into a transaction may need to be frozen and made unavailable to, or for the benefit of, the designated person.
Factors that may increase the risk of a person being on the sanctions list include:
- clients or transactions with links to jurisdictions subject to sanctions, even if the clients are based locally
- clients or transactions involving politically exposed persons (PEPs) from jurisdictions subject to sanctions
- clients or transactions involving complex corporate structures in jurisdictions with high terrorist financing risks
- clients who seem unable to receive funds or send funds from a bank account in their name, for no good reason
If your firm has a low general risk of working for clients on the sanctions list, but individual clients have higher risks, you may wish to check the sanctions list manually.
Search HM Treasury’s consolidated list by pressing Ctrl+F or using the search tool on OFSI's financial sanctions search page.
If a client comes up as a possible sanctions match, review all the identity information you hold against the sanctions list, to make sure you do not have a false positive identification.
The UK sanctions list includes information on:
- name
- date of birth
- nationality
- passport or identity card numbers
- last known address
If you have a ‘true match’, you will need to take steps to comply with sanctions, including considering your reporting obligations and the steps you need to take to comply with the asset freeze obligations.
If your firm has a higher risk of dealing with clients on the sanctions list, you may want to use an e-verifier.
These services incorporate the sanctions list into the databases they use to check identity information.
If you have a high risk of dealing with clients on the sanctions list, you should have processes to help find out whether key beneficial owners, or the intended recipient of transaction funds, are subject to the restrictions.
Sanctions and high-risk jurisdiction lists
You can check:
- individual clients against the sanctions lists
- lists of regimes to which financial sanctions have been applied
Selected sanctions lists
The 'control' test: NBT v Mints
Asset freeze sanctions apply not only to persons who are themselves listed, but also persons that they own or control.
The sanctions regulations set out the ‘ownership and control’ test.
Some information on ownership and control is provided in OFSI's general guidance.
We published a joint note with the Bar Council on the sanctions 'control' test following the Court of Appeal judgment in NBT v Mints [2023] EWCA Civ 1132.
Download our sanctions 'control' test note (PDF 168 KB)
The note was prepared before the:
- High Court's judgment in Litasco SA v Der Mond Oil and Gas Africa SA [2023] EWHC 2866 (Comm) and subsequent case law
- UK government's guidance on ownership and control: public officials and control
- amendments to OFSI's monetary penalties guidance, which explains how OFSI will address cases where someone makes a mistaken determination regarding ownership and control and inadvertently breaches sanctions as a result
These provide some guidance on assessing control issues, although uncertainty remains.
With the Bar Council, we're continuing in our attempts to engage with OFSI and others to help develop a framework that provides greater certainty and clarity.
Acting for a client on the sanctions list
This section considers the issues associated with acting for persons subject to asset freeze sanctions.
Separately, and irrespective of whether a client is designated, there may be restrictions on the provision of types of legal services. This is a feature of the sanctions regime relating to Russia (see section 13).
However, there are other cases where types of legal services could be prohibited: for example, because they would assist a client to breach sanctions.
Where sanctions are a potential issue for your advice, you will need to consider the nature of the work you are doing and the relevant restrictions.
When acting for designated persons, sanctions will need to be considered regardless of the nature of your work. In particular:
- designated persons may still have a legitimate need for legal services. However, receiving payment for your fees would need to be licensed by OFSI. This is reflected in OFSI’s guidance: “in most cases, you can provide legal advice to or act for a designated person without an OFSI licence. However, you cannot receive any payment for that advice without first obtaining an OFSI licence.” This includes being paid your fees or any funds on account
- you would also need to consider the nature of the instruction and that it does not breach sanctions (bearing in mind the restrictions imposed by the asset freeze, and the availability of any relevant exemptions or licences). For example, you must have a licence before any dealing with a designated person’s funds or economic resources can occur
In most circumstances, you will need a licence to be paid to provide services to a designated person.
There are two types of licences: general and specific.
General licences are published by OFSI. Each general licence is different and will set out:
- which sanctions regimes it applies to
- what activity is permitted under the licence (including who can use the licence)
- any conditions for using the licence, such as record-keeping or reporting requirements
There is a general licence under the Russia regime relating to legal fees.
OFSI also issued a general licence under the counter-terrorism regime relating to legal aid.
If there is no general licence that covers the activity you want to undertake, you will need to apply for (and obtain) a specific licence from OFSI.
A licence will only be granted where there are grounds to do so.
These grounds can be found in the legislative instrument for the relevant sanctions. You should check these before making an application.
OFSI has published guidance on:
- applying for licences
- the considerations it bears in mind when assessing the ‘reasonableness’ of legal fees in applications for licences for legal fees
OFSI strongly encourages firms to apply for a licence before providing substantive legal services, to be certain that fees will be recoverable.
If a specific licence is obtained, you will need to comply with any licence conditions.
You will also need to comply with your reporting obligations to OFSI (see section 8).
OFSI's general guidance provides more information about complying with the financial sanctions regime that is relevant when acting for designated persons.
This is supplemented by OFSI's frequently asked questions.
The sanctions regime applies in addition to reporting obligations under AML and counter-terrorist financing legislation, including the 2011 regulations.
For example, you also need to consider whether to apply enhanced due diligence measures when dealing with a person or entity from a high-risk third country.
You would also need to consider if there are any suspicions of money laundering or terrorist financing.
This will be particularly relevant where the prospective client has been sanctioned because of suspected involvement in criminal conduct or terrorist activity (for example, under a ‘thematic’ terrorist regime).
Even so, there may be circumstances where a SAR is not needed.
For example, a person on the sanctions list may be suspected of terrorist involvement but may not have received a benefit from, or been involved in, raising funds for those activities and the matter they may be asking you to undertake could have no involvement with their alleged terrorist activities: for example, a divorce or personal injury claim.
You should carefully consider the position and document your analysis.
If the Proceeds of Crime Act 2002 or Terrorism Act 2000 are engaged, it is important to recognise that the SAR regimes and sanctions regimes are separate.
If you obtain a ‘defence against money laundering (DAML)’ or ‘defence against terrorist financing (DATF)’ in relation to a particular matter (or assess that you do not need one), this does not remove the need for a licence from OFSI if the client is subject to an asset freeze.
Even where you’re satisfied you do not need to make a SAR, you must not deal with the resources of the designated person without OFSI’s approval.
If you rely on a general licence or obtain a specific licence from OFSI, this does not remove the need for a DAML or DATF if applicable.
You can discuss the person’s sanctioned status with them without tipping off, as the sanctions list is public information.
In summary, you must consider whether:
- the work you have been asked to do is permissible from a sanctions perspective
- in respect of your fees, a general licence applies and, if not, apply for and obtain a licence from OFSI before dealing with any funds
- you have a suspicion of money laundering or terrorist financing that requires a suspicious activity report (SAR) to the National Crime Agency (NCA), including consideration of whether a DAML or DATF is needed
You must comply with any licence conditions and with your reporting obligations to OFSI and (if applicable) to the NCA.
Disclosure of documents to a third party
In Aercap Ireland Ltd v AIG and others [2024] EWHC 144 (Comm), the High Court considered whether disclosure of reinsurance documents from a third-party broker would break UK sanctions because some of the insurers were Russian entities.
Butcher J held it would not breach the Russia sanctions regulations (regulations 28 to 29A).
Disclosure of the documents would not constitute the provision of financial services, reinsurance services or any other service, but would be obedience to a court order.
Even without an order disclosure, this would not be a sanctions breach.
Office of Financial Sanctions Implementation (OFSI) reporting obligations
You may need to contact OFSI about a designated person because you need a specific licence or this is required by the conditions of a general licence.
Firms are also subject to certain reporting requirements.
These changes were introduced by the European Union Financial Sanctions (Amendment of Information Provisions) Regulations 2017.
Specific reporting obligations are found in each sanctions regulation.
The requirements apply to all practices, not just those regulated for AML purposes.
They apply to an independent legal professional, which is defined as “a firm or sole practitioner who by way of business provides legal or notarial services to other persons, when providing such services”.
Generally, the reporting obligations in each regulation require you to make a report to OFSI if you know, or have reasonable cause to suspect, because of information that has come to you in the course of your practice that someone:
- has breached a prohibition or failed to comply with an obligation under the financial sanctions parts of the sanctions regulations, or
- is a designated person (that is, listed in OFSI’s consolidated list of financial sanctions targets)
If you fail to notify OFSI when required to do so, you’re committing a criminal offence.
However, the obligation only applies to information received on or after 8 August 2017.
The regulations also specify that they are not to be read as requiring a person who has acted or is acting as counsel or solicitor for any person to disclose any privileged information in their possession in that capacity (see below).
You may be required to contact OFSI even if you decide not to act for a person you know, or have reasonable cause to suspect, is a designated person.
Where you are required to make a report in relation to a client, the regulations also require that you report the nature and amount or quantity of any funds or economic resources held by it for the client at the time you first had the knowledge or suspicion that the client was a designated person.
Where you know, or have reasonable cause to suspect, that you hold frozen funds or economic resources (such as funds or resources owned, held or controlled by a designated person), you must provide a report to OFSI on these assets no later than 30 November in each calendar year.
What you must report
In summary, and subject to the point below on legal professional privilege, you must provide:
- the information or other matter on which your knowledge or suspicion is based
- any information you hold about the relevant person by which they can be identified
- (where relevant) the nature and amount of funds or economic resources you hold for the relevant person
Find out more about how to make a report to OFSI
The sanctions regime and the AML/CTF regime operate in parallel.
If you suspect a breach of financial sanctions, you should consider not only your reporting obligations to OFSI, but also whether you suspect a money laundering or terrorist financing offence, such that you need to make a SAR to the NCA (and, if appropriate, seek a DAML or DATF).
Remember that a breach of sanctions can be a criminal offence, so this can be a predicate offence for money laundering.
Legal professional privilege
You do not have to report privileged information.
However, where relevant, you’ll need to state clearly whether privilege applies and what information it applies to.
OFSI's general guidance states OFSI expects legal professionals to carefully ascertain whether legal privilege applies, and which information it applies to.
OFSI “may challenge a blanket assertion of legal professional privilege where it is not satisfied that such careful consideration has been made”.
Office of Trade Sanctions Implementation (OTSI)
In December 2023, the UK government created OTSI to strengthen the UK's implementation and enforcement of trade sanctions, including by:
- issuing guidance and raising awareness of trade sanctions
- issuing licences for matters within its remit
- investigate potential breaches of trade sanctions
- issue civil penalties
- refer cases for criminal enforcement
The Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024 (2024 Regulations) grant OTSI civil powers to enforce trade sanctions.
OTSI's remit covers:
- the provision or procurement of sanctioned services
- moving, making available or acquiring sanctioned goods, where those goods do not cross the UK border
- transferring, making available or acquiring sanctioned technology, where that does not cross the UK border
- providing ancillary services to the movement, making available or acquisition of sanctioned goods, where those goods do not cross the UK border
- providing ancillary services to the transfer, making available or acquisition of sanctioned technology, where those goods do not cross the UK border
The ‘services’ sanctions for which OTSI is responsible include the professional services sanctions under the Russia regime (which relate to the provision of certain types of services to ‘persons connected with Russia’, as defined).
For trade sanctions involving goods or technology that are exported from or imported into the UK, and related services, the licensing agency is the Export Control Joint Unit (ECJU), which is part of the Department for Business and Trade.
The enforcement agency is HM Revenue and Customs (HMRC).
The ECJU/HMRC remain responsible for goods and technology, such as military and dual-use goods and technology, which are subject to strategic export controls.
OTSI’s enforcement powers came into force on 10 October 2024.
Read the statutory guidance on the civil enforcement guidance.
Trade sanctions licensing
If you think your activities might be in breach of trade sanctions, then (unless a general licence applies and you can comply with its terms) you will need to consider applying for a licence from OTSI or, if applicable, ECJU.
OTSI published guidance on licence applications.
Trade sanctions licensing is outside the scope of this guide.
OTSI reporting
The 2024 Regulations also introduced trade sanctions breach reporting obligations for ‘relevant persons’, including a firm or sole practitioner that provides legal or notarial services to other persons, by way of business.
Relevant persons must make a report where they:
- know, or have reasonable cause to suspect, that a person has breached a prohibition or failed to comply with an obligation under trade sanctions regulations, and
- the information or other matter on which the knowledge or cause for suspicion is based came to them in the course of carrying on their business. This is defined as being in the course of providing the legal or notarial services
Similar to OFSI reporting, the 2024 Regulations expressly provide that they do not require a person who has acted or is acting as counsel or solicitor for any person to disclose their privileged information in their possession in that capacity.
Read the UK government guidance on reporting breaches of trade sanctions.
Sanctions on Russia
These sanctions aim to encouraging Russia to cease actions destabilising, undermining, or threatening the territorial integrity, sovereignty or independence of Ukraine.
As well as a large number of asset freeze designations, there are extensive and complex trade restrictions in relation to Russia including, in very broad terms, in relation to:
- the supply of an extensive range of goods or technology to Russia, and ancillary services
- the import or purchase of an extensive range of goods and technology from Russia, and ancillary services
- investment in Russia and Russian companies
- the supply of professional services to Russia
Many of these restrictions apply not only to dealings with Russia, but also ‘persons connected with Russia’, as defined in the regulations.
The sanctions prohibit (among other things):
- direct or indirect provision of (transactional) legal advisory services
- provision of trust services
- dealing with securities or money market instruments issued by certain Russian and Russian-owned companies and loans and credit arrangements granted to certain Russian and Russian-owned companies
- direct and indirect provision of:
- auditing services
- advertising services
- architectural services
- engineering services
- IT consultancy and design services
The restrictions are set out in the Russia (Sanctions) (EU Exit) Regulations 2019.
The Russia regulations have been amended on multiple occasions.
The Russia statutory guidance provides a high-level summary of all the restrictions in force.
Given the complexity of the Russian sanctions, it is important in relation to matters with a Russian nexus to:
- check the sanctions list (persons designated under this regime are included on the UK sanctions list in the usual way), and
- consider the other elements of the sanctions regime (other types of financial and trade sanctions)
Law firms withdrew from the Russian market at pace following the invasion.
It is important that firms are able to continue to give advice to those looking to divest from the Russian market.
Legal advisory services restrictions
These restrictions can be found at regulation 54D and Schedule 3J of the Russia Regulation.
General licence for payment of legal fees: Russia and Belarus
OFSI issued a general licence permitting firms to receive legal fees owed by individuals and entities designated under the Russia and Belarus sanctions regimes, provided they meet the terms of the licence.
This licence has a fixed term. It has been renewed for successive periods, in each case with some changes to the permissions and conditions of the licence.
The current general licence is INT/2025/6160920, which took effect on 29 April 2025. It expires on 28 October 2025.
The general licence is made up of:
- Part A: fees and expenses incurred pre-designation
- Part B: fees and expenses incurred post-designation
The general licence includes a range of provisions, including:
- caps on professional legal fees and expenses
- caps on fee rates under Part B
- restrictions on the types of work for which the licence can be used (notably, it does not apply to cases involving defamation or malicious falsehood. A specific licence must be obtained if these services are to be offered to a designated person. There will be a presumption against this being granted)
- provisions relating to the bank accounts into which fees can be paid
- record-keeping requirements
- reporting obligations to OFSI
If you intend to rely on the general licence, you should ensure you have understood its scope and conditions and put processes in place to ensure compliance with these.
If the general licence does not apply and you intend to receive fees for acting for a person subject to an asset freeze, or otherwise to deal with the funds or economic resources of a person subject to an asset freeze, you will need to apply for a specific licence.
Russia/Belarus-specific reporting requirements
The reporting obligations to OFSI and OTSI described above apply in the context of the Russia regime.
There are also certain reporting requirements that are currently specific to the Russia and/or Belarus regulation.
‘Prohibited persons’ – reporting by relevant firms
Relevant firms must inform OFSI of any funds or economic resources they hold for a “prohibited person”, defined as a person designated under regulation 18A. This includes:
- the Central Bank of Russia
- the Russian Ministry of Finance
- the Russian National Wealth Fund
- any persons owned or controlled directly or indirectly by the above, or acting on their behalf or at their direction
‘Designated persons’ – reporting by the designated person
Designated persons under the Russia and Belarus regimes must proactively provide details of their UK assets to OFSI (or their worldwide assets if they are UK persons) subject to a bespoke penalty threshold.
Specifically, designated persons who are a “United Kingdom” person under section 21(2) and (3) of the Sanctions and Anti-Money Laundering Act 2018 must disclose:
- any funds or economic resources they own, hold or control, and
- the nature, value and location of those funds or economic resources
regardless of where in the world they are located.
Designated persons who are not a “United Kingdom” person must report under regulation 70A(2) the nature, value and location of the UK funds and economic resources.
The initial report must be provided within 10 weeks, whichever is later, of:
- the date the legislation comes into force (26 December 2023), or
- the date of designation
Any later change in financial circumstances must be reported to OFSI as soon as practicable.
Designated persons must report any funds or economic resource if the value exceeds £10,000.
Oil price cap – reporting by persons involved in relevant activities
There are also specific reporting obligations relating to the oil price cap regime, including breach reporting for those involved in the:
- supply or delivery of oil or oil products, or
- provision of financial services or funds or brokering services relating to the same
It is generally an offence for a designated person to fail or refuse to comply with the relevant obligations without reasonable excuse.
It is also an offence to, knowingly or recklessly, give information that is false in a material particular.
Read OFSI’s blog on the reporting requirements and financial sanctions FAQs.
SRA guidance on complying with sanctions
The SRA published guidance covering:
- financial sanctions
- anti-money laundering
- strategic litigation against public participation (SLAPPs)
- continuing to act for clients
The guidance highlights that the SRA is carrying out “spot checks on firms to assess compliance with the financial sanctions regime”.
It's important that all firms immediately review their policies, controls, procedures and sanctions compliance.
Read the SRA's guidance on the Russian conflict and sanctions.
The SRA published guidance on complying with UK sanctions in November 2022 (updated in May 2025).
It also published guidance on complying with trade sanctions in February 2025.
The guidance on complying with UK sanctions aims to help solicitors and firms comply with the financial sanctions regime.
It includes high-risk areas and a framework firms can put in place with a view to making sure they're compliant.
Remember that the sanctions regime applies to all firms – not just those that offer services in scope of the MLRs 2017.
SARs glossary code for sanctioned Russian entities
If you suspect a breach of sanctions, you may also have a suspicion of money laundering.
If you have a reportable suspicion for the purposes of the Proceeds of Crime Act 2002 and you are making a SAR, use the SARs glossary code XXSNEXX where you suspect activity is:
- consistent with money laundering, and
- linked to entities sanctioned by the UK, EU, US and other overseas jurisdictions as a result of the Russian invasion of Ukraine
Indicators of sanctions evasion risk
OFSI and others have published ‘red alerts’ setting out red flags and risk factors for sanctions evasion.
It may be helpful to consider whether these can be incorporated into your procedures, risk assessments and/or training.
It may also be helpful to consider these when assessing potential sanctions concerns.
Below is a selection of indicators of sanctions risk. This is not an exhaustive list.
- Russian clients communicating changes to the beneficial ownership of their private investment companies (PICs) to non-Russian or dual national family members
- Requests to transfer assets between Russian national/dual-national family members
- Use of trust arrangements, with circumstances of transfers calling into question whether the original owner retains indirect control or otherwise could retain a benefit from the assets transferred
- Assets transferred have usually been shares in companies, both UK and overseas, including both minority and controlling stakes in these businesses
- Payments from venture capital and private equity vehicles, many located in offshore jurisdictions or the far east
- Clients seeking to move all their assets to other financial institutions and closing their accounts in London
- Clients domiciled in Russia asking whether they can make transfers to their London account
- Attempts to purchase sanctioned Russian securities, which have drastically fallen in price
- Increased volume of transaction monitoring alerts resulting from Russian and Ukrainian clients making and receiving larger transfers than is typical
- Payments received by UK businesses, often in innovative areas, also with some elements of ownership by Russia nationals
- Payments via a fintech with Russian investor nexus
- Research on private equity/venture capital vehicles and some people with significant control/officers of UK businesses showing individuals connected to Russian industry previously subject to sectoral sanctions and on occasion politically exposed persons (PEPs)
- Russian high net worth individuals who are already on international sanctions lists (but not UK list) and/or who anticipate that they may become a sanctions target, transferring assets to family members and/or close associates such as employees
- Change in address and names for Russian entities one day prior to invasion
- Change of ultimate beneficial owners from Russian to other nationalities
- Circumvention attempts through open account trade-based money laundering (TBML) typology – for example, increase in third-party open account payments
- Purchase, sale, storage or transfer of ownership of artwork or cultural property – see the NCA warning (PDF)
In July 2025, the NCA issued a red alert on the shadow fleet sanctions evasion and avoidance network.
Russian oil trading companies are using a complex network of companies to evade sanctions.
Risk indicators include:
- companies with limited trading history very quickly trading large volumes of oil
- limited information on ownership, directors or beneficiaries
- multiple transfers between obscure companies
- companies registered or operating in known jurisdictions of high risk, including those where shadow fleet entities are known to operate
- companies with a limited online presence and no company website or contact information (if a website exists, it often contains generic stock photos and no detail on the individuals operating the company)
In May 2024, the Royal United Services Institute (RUSI) published analysis of the common services that professional enablers provide to sanctioned individuals. This included:
- obscuring ownership through shell companies and through client proxies
- channelling funds into desirable assets including real estate, artwork and precious minerals
- diluting ownership stakes to avoid thresholds
RUSI identified 12 recommendations to help sanctions achieve their desired results.
OFSI's legal sector threat assessment includes case studies and red flags.
Resources to help you and your firm comply
SRA guidance on complying with the UK sanctions regime
Collection of other UK government guidance on Russia: UK sanctions on Russia
Financial Conduct Authority statement on financial sanctions on Russia
OFSI financial sanctions FAQs – guidance and technical information on UK sanctions, including Russia and the Russian oil services ban, general licensing and the legal services general licence.
OFSI legal sector threat assessment
For guidance on trade sanctions, visit the:
Email:
- FCDO sanctions: sanctions@fcdo.gov.uk
- OFSI: ofsi@hmtreasury.gov.uk
- OTSI: otsi@businessandtrade.gov.uk
- ECJU: exportcontrol.help@trade.gov.uk
- import controls: importcontrols@trade.gov.uk
- transport sanctions: transportsanctions@dft.gov.uk
Anti-money laundering helpline
Our AML helpline offers support on sanctions and high-risk jurisdictions lists.
Call 020 7320 9544 or email aml@lawsociety.org.uk.
Opening hours: 9am to 5pm, Monday to Friday