Writing in Thomson Reuters Regulatory Intelligence, Partner Jamie Lester provides clarity on the current legal sanctions landscape, and discusses the approaches corporates must take in navigating ever-evolving legislation and regulations.

Jamie’s article was published in Thomson Reuters Regulatory Intelligence, 10 October 2025.

Following President Trump’s recent state visit, the increasing divergence between the sanction regimes operating in the UK, EU and US has become ever more apparent. Although Russia has been the primary focus of international attention since the invasion of Ukraine three years ago, 5,452 individuals or entities were sanctioned between 2020 and 2025 involving 85 nationalities.

Globally, the legal sanctions landscape has never been more complex and the obligations on those potentially impacted is equally onerous, especially when dealing with clients operating in a sanctioned jurisdiction or doing business with individuals and entities that are subject to sanctions.

To achieve their foreign policy and national security objectives, the framework of international and national restrictions imposed by diverse governments continues to evolve at speed. Lawyers and businesses therefore need to understand and be familiar with current UK and international legislation and regulations concerning designated persons and entities.

Sanctions can target individuals, entities, countries, or specific activities. The UK government, for example, publishes sanctions lists which names individuals, businesses, organisations and ships that are the targets of sanctions measures, such as asset freezes, transport sanctions, trade bans, and travel bans.

Driven by international events and geopolitical tensions, the sanctions landscape is constantly changing. There are currently 36 live regimes to consider. In the UK, annual reports must be filed in relation to any frozen assets held, confirming exactly how much is held, on whose behalf, and what regime it applies to, as well as notifying other regimes.

For law firms, general counsel, family offices, and businesses, that creates a lot of compliance work: complex rules, overlapping and potentially conflicting regimes, and the need for constant vigilance in relation to new sanctions, new individuals and new entities being added to diverse international sanctions lists, often on a daily basis.

To navigate this dynamic landscape and avoid substantial monetary fines from regulators, potential criminal prosecution and reputational damage, necessitates risk-based sanctions compliance programmes. Robust due diligence, careful and continuous monitoring and highly effective internal controls are therefore imperative.

Equally, those affected also need to be aware of the divergence between the UK and other regimes, such as the EU, and the resulting impact on compliance. Divergence creates hidden costs for both businesses and individuals: a tightening sanctions regime means that compliance teams must spend significant time upfront in order to understand the scope and ramifications of these changes.

To remain up-to-date and comply with diverging regimes, the principal objective for compliance teams and advisers is to monitor changes to key lists on a very regular basis by signing up to receive emailed automatic updates whenever there is a change to the respective lists so as to keep abreast of changes to the UK, EU, US and United Nations’ lists and respond quickly if any change presents a risk.

Invariably, immediate reporting obligations arise. UK regulations, for example, are very clear: if the third party, to or from which you make or accept payments, are sanctioned by other regimes, you must also comply with those regimes.

That means taking action without delay, potentially freezing money in a client account, making an immediate application, or seeking advice about whether an immediate application is needed for a licence, or whether a general licence or an exemption applies.

Sanctions regimes are routinely updated on a daily basis. Across global lists, updates can sometimes appear two or three times a day. Ideally, searches should therefore be made of / automatic updates obtained from the following government websites, covering the UK, EU and US:

 – Office of Financial Sanctions Implementation (OFSI) HM Treasury: https://sanctionssearchapp.ofsi.hmtreasury.gov.uk/
 – European Commission EU sanctions tracker: https://data.europa.eu/apps/eusanctionstracker
 – EU sanctions map: https://www.sanctionsmap.eu/#/main
– The Office of Foreign Assets Control (OFAC), a financial intelligence and enforcement agency of the United States Treasury Department: https://ofac.treasury.gov/sanctions-list-search-tool and https://sanctionssearch.ofac.treas.gov

In addition, the following open-source website provides further useful information from 298 data sources, comprised of two million entities from multiple different sanctions regimes:

 – Open Sanctions: https://www.opensanctions.org

For advisers and compliance teams, obligations relating to sanctions are becoming greater in scope and scale. You need to act quickly and decisively. Failure to act only raises the stakes: it may result not only in financial sanctions being imposed as well as potential criminal repercussions.

For example, under its new settlement proposal scheme, compliance with the OFSI regime will become notably more arduous while the agency’s enforcement process will significantly increase penalties: base penalties are anticipated to increase by 25% from the previous guidance. Meanwhile, the current self-disclosure discount of 30% for breaching the regulations will only be available to those who report the breach at the earliest opportunity and then cooperate fully with any subsequent OFSI investigation.

Unless an infraction is minor, transgressors will be hit hard. Proposed indicative penalties are £5,000 for minor offences and £10,000 for aggravated offences. The maximum penalties for getting something completely wrong will double: to either £2 million, or up to 100% of the estimated value of the economic resources to which the breach relates.

To protect themselves, compliance teams should also consider taking other prudent steps:

– Inform your insurance company at an early stage: they need to be aware of what’s going on.
– Take guidance from OFSI: exemptions and general licences might apply.
– Make an application for a standalone licence, subject to advice from specialist counsel.
– Make sure you know whether you have to report and do annual reporting.
– Monitor HMRC for sanctions-related updates.

Compliance teams must continue to adapt to diverging sanctions regimes, put sufficient manpower into effectively monitoring them and respond quickly. Where a potential risk arises, sign up to updates. You must be able to report very quickly, especially if you fall under a regime.

If you act for anyone who has an international presence, do business with anyone on an international scale, or work with companies operating in sanctioned regimes, you should regularly check the OFSI consolidated sanctions lists and other sanctions lists outlined above, including the consolidated lists.

Ultimately, you need to know who your client is and do periodic checks: know who you are doing business with and, where relevant, the beneficial owners (UBOs) behind them, such as corporates or family offices.