OFSI unveils enhanced UK sanctions enforcement guidance: what’s new?

On 9 February 2026, the UK’s Office of Financial Sanctions Implementation (OFSI) published a revised version of its Financial Sanctions Enforcement and Monetary Penalties Guidance following consultation on enhancements to its civil enforcement processes. The update reflects changes intended to increase clarity, predictability and proportionality in enforcement of financial sanctions in the UK.

We consider the key changes below.

1. Introduction of Early Account Scheme (EAS)

A new Early Account Scheme has been added. Under the EAS, subjects can provide an early factual account of a potential breach in exchange for a reduction of up to 20% on any monetary penalty applied. It is designed to encourage early, detailed engagement by subjects under investigation for potential sanctions breaches. The guidance specifies eligibility, procedural requirements and the substantive information OFSI expects to receive.

OFSI has discretion to offer the EAS and participation is limited to corporate entities only. OFSI must be satisfied the subject can provide a comprehensive, accurate and timely factual account of the suspected breach, supported by an independent third-party investigation where appropriate. Unlike Deferred Prosecution Agreements (DPAs), which operate in a criminal context, the EAS does not require a formal admission of liability, a negotiated settlement or necessarily a self-report, and does not avoid enforcement action. The EAS simply mitigates any penalty within the civil regime by incentivising early factual clarity in regulatory enforcement. DPAs typically offer substantially higher financial discounts in exchange for prompt self-reporting and exemplary cooperation, and involve binding conditions to avoid prosecution. 

2. Revised Case Assessment Framework

OFSI has restructured its case assessment model, which intends to provide greater transparency on how OFSI categorises breaches.

Under the previous framework, OFSI assessed suspected breaches against a set of broad “case factors” designed to capture both the seriousness of the conduct (including knowledge of financial sanctions, deliberate circumvention and harm or risk to the regime) and aggravating or mitigating features (professional facilitation, failure to seek a licence, or failure to respond to information requests). These factors informed OFSI’s decision to take enforcement action and the level of any penalty. 

The updated guidance revises, renames, removes or consolidates a number of these “case factors”, including:

• Introduction of “strategic priority of the regime” as a distinct factor.
• Updates to factors covering intention, knowledge and reasonable cause to suspect, and circumvention.
• Renaming knowledge of sanctions to knowledge and management of financial sanctions risk.
• Removal of factors such as professional facilitation, failure to apply for a licence, and failure to respond to information requests.

These changes aim to provide greater clarity on OFSI’s enforcement reasoning and expected compliance behaviours.

3. Enhanced Monetary Penalty Framework

Several significant changes affect how monetary penalties are calculated and awarded.

The guidance updates the monetary penalty process to incorporate multiple discount mechanisms:

• Voluntary disclosure and co-operation discount — up to 30%,
• Settlement Scheme discount — 20%,
• Early Account Scheme (EAS) discount — up to 20%.

These mechanisms operate at different stages of engagement with OFSI and reward different forms of cooperation. The voluntary disclosure and co-operation discount applies where a person proactively self-reports a breach and provides timely, complete and meaningful assistance to OFSI, thereby reducing the need for regulatory intervention. The Settlement Scheme discount is available where a party agrees to resolve a matter by accepting OFSI’s penalty decision at an early stage, avoiding the need for full statutory representations or appeal. As set out above, the EAS incentivises the provision of a comprehensive factual account during OFSI’s investigation, before a penalty decision is reached. 

The methodology clarifies what constitutes complete voluntary disclosure and meaningful cooperation for the purpose of securing a discount.

4. Financial Hardship Considerations

A new financial hardship policy has been introduced. OFSI will consider claims of financial hardship in exceptional circumstances when deciding whether to reduce a penalty. The onus is on the subject to demonstrate that such a reduction accords with the public interest.

5. Fixed Monetary Penalties for Specific Offences

The updated guidance establishes fixed monetary penalties for certain conduct, notably information, reporting and licensing offences, with set penalty levels (e.g., £5,000 and £10,000) and criteria for their application. While OFSI retains discretion to impose higher penalties up to the statutory maximum where appropriate, the fixed amounts are aimed at proportionate, consistent treatment of less serious procedural or administrative breaches, such as failing to respond to information requests or not complying with licence reporting conditions. 

Context and Strategic Outlook

These reforms follow a consultation process and reflect OFSI’s intent to respond to increasing enforcement activity, complexity of sanctions cases and the need for a more efficient and proportionate civil enforcement regime. OFSI has emphasised that the strengthened framework is aligned with its strategic objectives to protect the integrity of the UK sanctions regime and to enhance transparency and predictability for regulated parties.

OFSI’s appetite for enforcement action is growing with its powers. Following the expansion of its civil penalty powers in 2022, suspected breach reports rose from 147 in 2021 to 473 in 2023, but the vast majority were closed without enforcement action. By 2025, OFSI reported 240 live investigations and 57 enforcement actions, including monetary penalties, warning letters, disclosures and referrals. While case volumes and investigative activity have grown over the years, the rate of published penalties has remained low.

Practical Takeaways 

Notwithstanding the relatively low levels of enforcement outcomes, sanctions remains a significant risk area for many companies operating on an international level, not least following the change to the principles of corporate criminal liability under the Economic Corporate Crime and Transparency Act 2023 (see our article on the changes here).

Companies may want to consider the following practical steps in response to the updated guidance:

• The revised case assessment framework requires careful internal documentation of risk management and knowledge controls to mitigate adverse severity classifications.
• The introduction of fixed penalties and refinements to co-operation incentives underscores the importance of prompt engagement with OFSI during investigations.
• In the event that enforcement is likely, consider the financial hardship provisions in planning potential responses to OFSI.