Increased Risk of UK Sanctions Enforcement–An Analysis of Recent Sanctions Enforcement Action in the United Kingdom

On 30 September 2025, the UK’s Office of Financial Sanctions Implementation (OFSI) published a penalty notice regarding a breach of UK financial sanctions by Colorcon Limited (Colorcon). This decision is part of a wider trend of increasing scrutiny in relation to UK sanctions enforcement.

Recent enforcement actions 

Colorcon

In its most recent enforcement decision, OFSI imposed a £152,750 fine on UK-registered Colorcon for making payments to accounts held at sanctioned banks when closing its Moscow office. Out of the 123 payments made, only 44 were permitted under a general licence for companies winding down their Russian operations—the total amount transferred in breach was £128,277.

Whilst Colorcon’s employees were not sanctioned, the fact that they held accounts at sanctioned banks meant that the transfers made funds available to Designated Persons (DPs).

Colorcon notified OFSI of the breaches four months after their discovery. Although OFSI acknowledged the company’s full disclosure and subsequent cooperation, the delay meant the disclosure could not be considered prompt. Accordingly, a 35% discount was applied to the penalty instead of the maximum 50% available for voluntary disclosures.

Vanquis Bank

On 8 September 2025, OFSI issued a Disclosure Notice—a form of nonmonetary penalty—against Vanquis Bank Limited (Vanquis) for making funds available to a DP.

The day before notifying Vanquis of the DP’s details, OFSI prewarned it that a suspected customer was to be designated under terror financing risks. Despite receiving a prenotification from OFSI, the bank did not restrict the customer’s account for eight days following the designation. During that time, the DP managed to withdraw £200 in cash and made a £8.99 transaction. Vanquis notified OFSI of the breach 13 days after the designation. 

OFSI concluded that a Disclosure Notice was a proportionate response due to Vanquis’s voluntary reporting and cooperation, as well as the low value of the breach. However, OFSI remarked that Financial Conduct Authority (FCA)-regulated bodies are expected to understand sanctions risks and employ appropriate control measures.

Markom Management 

On 31 July 2025, OFSI published a £300,000 penalty notice against UK-incorporated Markom Management Limited (MML) regarding a payment of £416,590 to a DP.

MML forms part of the Markom Group, which includes Markom Management Cyprus (MMC). Following an overpayment involving MMC, MML instructed Gazprombank to transfer RUB 33 million (or £416,590) from MMC’s account to the DP’s account. This payment made funds directly available to a DP, designated for their financial connections to those involved in the destabilisation of eastern Ukraine.

MML notified OFSI eight months after the breach, which was identified as a result of third-party activity. The breach was aggravated by MML’s lack of policies or controls to manage sanctions risks related to informal transactions within the Markom Group. 

Key compliance lessons

The recent enforcement action in the United Kingdom highlights lessons to be learned by those subject to compliance with the UK sanctions regime, including:

• Regularly reassess your sanctions compliance policies and processes so that they adequately address your level of exposure to sanctions risks. Having a compliance process will not be a mitigating factor if it is not fit for purpose.
• Do not solely rely on third parties to undertake your sanctions screening without knowledge or understanding of their processes.
• Apply screening to both internal and external transactions.
• Disclose a breach to OFSI as quickly as possible but ensure appropriate legal advice is sought in this regard.
• If you seek to rely upon a general or special licence, ensure you identify the limits of the licence and any related reporting requirements so that you are not at risk of conducting transactions or undertaking prohibited activities outside of its scope.
• Ensure appropriate policies and procedures are in place, particularly for organisations regulated by a professional body, such as the FCA.
• Immediately take appropriate steps and screening measures if you receive a prenotification from OFSI that a customer or associate may be designated in the near future.
• Reply promptly to OFSI if you receive a request for information.

Conclusion

Considering the examples above, OFSI’s most recent decisions signal a more forceful approach to UK sanctions enforcement. Businesses are expected to be proactive in their compliance, with an emphasis placed on prompt and voluntary disclosure. 

Keeping in mind OFSI’s ongoing consultation on strengthening its enforcement powers, it is likely that compliance and reporting obligations will significantly increase in the future. Accordingly, organisations should act as soon as possible to ensure their compliance processes are adequate.

If you have any questions or would like to discuss what the sanctions enforcement regime means for you, please do not hesitate to contact the authors listed above.