UK Sanctions Update – Summer 2026

Since the Spring edition of our UK Sanctions Update, the UK's sanctions framework has continued its shift from policy development to active enforcement, marked by significant amendments to the Russia regime, increased enforcement activity, new guidance for industry and continued efforts to improve international coordination.

For businesses operating internationally, the key message remains clear: UK authorities expect sanctions compliance programmes to be dynamic, risk-based and capable of responding quickly to changes in designations, ownership structures and evasion techniques.

Top 10 developments since our Spring Update

1. Expansion of OTSI’s licensing remit: From 27 April 2026, the Office of Trade Sanctions Implementation (OTSI) became responsible for licensing sanctioned goods and associated ancillary services for export, which are not otherwise subject to export controls. Previously, OTSI was only responsible for licensing sanctioned standalone services, such as professional business services. The Export Control Joint Unit (ECJU) remains responsible for licensing all goods and associated ancillary services subject to export controls only, and goods and ancillary services which are subject to both strategic export controls and sanctions. Expanding OTSI’s Licensing Remit  – Office of Trade Sanctions Implementation
   
   
2. Significant expansion of the UK’s Russia sanctions regime 
   1. On 19 May 2026, the UK expanded sanctions on Russia, introducing new import and export restrictions aimed at limiting Russia’s ability to generate revenue and support its war effort. The measures cover oil products made from Russian crude, certain industrial and technology-related goods, construction services, and maritime services linked to Russian LNG, alongside new licensing arrangements and guidance.
   2. On 16 June 2026, the FCDO announced a major sanctions package targeting Russia's shadow fleet, military procurement supply chains and sanctions circumvention channels. The package imposed 70 new designations and included measures against financial institutions, procurement intermediaries, GRU-linked networks, and 27 vessels involved in transporting Russian oil and LNG.
      
      
3. OFSI imposes fine on European bank: On 30 April 2026, OFSI fined Deutsche Bank AG London Branch (DBLB) £165,000 for processing two payments in June and July 2022, totalling £635,618.75, to Okko LLC, a Russian company that was wholly owned by the sanctioned entity JSC New Opportunities at the time. In its penalty notice, OFSI found DBLB’s sanctions screening systems failed to identify the ownership link because its third-party data provider did not include relevant ownership information.
   
   
4. OFSI issues its largest post-2022 Russia penalty: On 17 June 2026, OFSI announced that it imposed a £1,000,920.59 monetary penalty on Sabre Global Technologies Limited (SGTL) for breaching UK financial sanctions, the largest civil monetary penalty imposed under the UK’s Russia sanctions regime since Russia’s invasion of Ukraine in 2022. It is also the first time that OFSI has fined a company specifically for seeking to circumvent sanctions as a standalone violation, alongside the breach of sanctions itself.
   
   
5. FCA publishes findings from sanctions systems and controls review: On 28 May 2026, the Financial Conduct Authority published the results of its engagement with more than 150 supervised firms regarding sanctions compliance, finding that the causes of most reported financial sanctions breaches were weak due diligence processes and poor alert management and screening processes. For trade sanctions, many firms lack sufficiently developed risk assessment frameworks and clear processes to identify and manage potential exposure to risks.
   
   
6. OFSI and OFAC publish comparative sanctions guidance: On 23 June 2026, OFSI and the US Office of Foreign Assets Control (OFAC) published new joint guidance to help businesses navigate important differences and similarities between the UK and US sanctions regimes. The document compares key aspects of the two regimes, including designations, licensing, reporting obligations and record-keeping requirements, reflecting the continuing trend towards closer UK-US sanctions coordination.
   
   
7. Government continues review of the ownership and control test: On 30 June 2026, OFSI published insights following its call for evidence on the ownership and control test. Respondents highlighted practical challenges arising from the "control" limb of the test, including increased compliance costs, legal uncertainty, and difficulties obtaining reliable information.
   
   
8. HMRC Publicly Names Sanctions Settlement Recipient for the First Time: On 29 June 2026, HMRC announced payment of a compound settlement for breaches of the Russia sanctions regime with the first company publicly named by HMRC for accepting such a penalty. 
   
   
9. New open general export licence for dual-use items: On 25 June 2026 the ECJU introduced a new OGEL for dual-use items, intended to make it easier for UK businesses to export goods to trusted partners, and expanding the list of destinations covered. It combines the EU Member States Dual-Use OGEL and the General Export Authorisation. Any business registered for these OGEL’s should register for the new OGEL going forward.
   
   
10. Mutual re-insurance wind down general licence amended and extended by OFSI: On 6 July 2026, OFSI published an amended and extended maritime mutual re-insurance wind down general licence. Any UK insurer wishing to rely on this licence should make sure it can comply with the licence conditions.

Key themes for compliance/ legal teams

Three themes stand out from developments over the past three months:

• Enforcement is accelerating. The revised OFSI enforcement framework is now being actively used, with substantial monetary penalties and greater public visibility of enforcement.
  
  
• Russia remains the primary focus. New designations continue to target shadow fleet operations, military procurement networks, sanctions evasion mechanisms and financial institutions supporting Russia's war effort.
  
  
• Authorities expect higher compliance standards. The FCA's findings, OFSI's continued focus on ownership and control, and increasingly sophisticated enforcement activity indicate that regulators now expect firms to look beyond simple name-screening and undertake deeper risk-based assessments. 
  
  
• Change remains constant. At the time of writing, further designations were announced against Iranian proxy groups and Russian cybernetworks. We will continue to bring regular updates as UK sanctions continue to evolve. 

Looking ahead

As geopolitical tensions remain elevated and the UK continues to align closely with allies including the US and G7 partners, businesses should expect further activity in relation to Russia, sanctions circumvention networks and maritime trade. A combination of expanded sanctions powers, increased international coordination, and more assertive enforcement means that sanctions compliance remains an area requiring continual monitoring and active management.

The message from government throughout 2026 has been consistent: sanctions compliance is no longer simply about screening against a list. Firms are expected to understand ownership and control structures, supply-chain exposures, maritime risks and indirect dealings with sanctioned persons. Those that fail to do so are increasingly likely to attract regulatory scrutiny.

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