UK Proposes Doubling Top Sanctions Penalty to £2 Million – What Firms Need to Know
- Simon Roberts
- Aug 15
- 2 min read
The UK government is taking a tougher stance on financial sanctions enforcement. In a recent consultation, HM Treasury has proposed doubling the statutory maximum civil monetary penalty for the most serious sanctions breaches — from £1 million to £2 million.
The proposed change comes alongside wider measures aimed at strengthening the Office of Financial Sanctions Implementation (OFSI), the division of HM Treasury responsible for sanctions compliance and enforcement in the UK.
1. Why the Increase?
According to HM Treasury, the goal is to ensure UK financial sanctions are “properly understood, implemented, and enforced”. By raising the upper penalty limit, the government aims to:
Reflect the seriousness of sanctions breaches.
Deter non-compliance.
Align enforcement outcomes with the growing complexity and scale of sanctions regimes.
2. More Than Just a Penalty Cap Change
Currently, OFSI can impose a penalty equal to the greater of:
£1 million, or
50% of the estimated value of the breach.
The consultation proposes changing this second measure to 100% of the breach value — meaning firms could face penalties equal to the entire value of a prohibited transaction, even if it far exceeds £2 million.
3. Streamlining Enforcement
HM Treasury’s paper notes that OFSI has also identified process revisions designed to:
Resolve cases more efficiently.
Deliver public enforcement actions faster.
Reduce burdens on both OFSI and the firms/individuals under investigation.
4. Consultation Details
Stakeholders have until 19:00 on 2 September 2025 to provide feedback. Responses can be submitted via:
Online form (link in HM Treasury consultation page), or
When responding, contributors should state whether they are replying as an individual or on behalf of an organisation, and clearly reference which questions their comments address.
5. What This Means for Regulated Firms
If implemented, these changes would:
Increase the financial risk exposure for sanctions breaches.
Make sanctions compliance and transaction screening even more critical.
Require firms to review and stress-test their sanctions controls, governance, and breach escalation procedures.
How K2 Can Support
At K2, we help regulated firms stay ahead of sanctions risks through:
Sanctions Risk Assessments – mapping exposure across customers, payments, and jurisdictions.
Control Framework Reviews – testing screening systems for effectiveness and completeness.
Training & Awareness – ensuring staff understand both the rules and the consequences of breaches.
Breach Response Playbooks – enabling rapid, compliant handling of potential violations.
With penalties potentially rising to £2 million — and the ability for OFSI to claim 100% of a breach’s value — there has never been a more important time to ensure your sanctions compliance framework is fit for purpose.
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