New designations
In relation to Russia, the UK has deployed multiple waves of sanctions packages covering individuals, banks, state-owned enterprises, energy exports, shipping fleets and military technology supply chains. In October 2025, the UK designated Rosneft and Lukoil, central players in Russia’s oil industry. These measures extended to subsidiaries and impacted global supply chains, requiring businesses in energy, shipping, finance and logistics to reassess their exposure and compliance strategies. It is anticipated that we will continue to see further packages against Russia. However, it is also anticipated that there may be a focus on other high-risk jurisdictions including Iran, Syria and Venezuela (amongst others). For example, in December 2025, the UK updated the designations of individuals and entities under the Iran sanctions regime and the Iran nuclear sanctions regime. In early 2026, the focus globally has again turned to Venezuela. A year ago, around Maduro’s inauguration, the UK acted alongside partners and announced a wave of new sanctions. The UK targeted fifteen individuals, including judges, senior ranking officials in Maduro’s regime responsible for undermining democracy, the rule of law, and for human rights violations. It remains to be seen whether further packages will follow.
We therefore anticipate that sanctions volumes will stay high and will relate to a variety of regimes, so list monitoring must be continuous and multi-jurisdictional. On Wednesday 28 January 2026, the UK government moved to a single sanctions list. The UK Sanctions List (UKSL) will become the only official list containing all UK sanctions designations. The OFSI Consolidated List and its search tool will no longer be updated after this date. This change affects any business that screens customers or counterparties against UK sanctions.
A move towards greater enforcement?
For insurers and businesses, the risk environment is changing and the importance of having credible and effective controls in place should be a continuing focus as we move into 2026. This is particularly true when it comes to Russia. Sanctions are used by the UK Government as a foreign and security policy tool. Geopolitical factors continue to shape the sanctions landscape and it is becoming clear that sanctions are no longer a financial compliance exercise but rather form part of a national security strategy. Russia is going to great lengths to circumvent sanctions, and continues to procure Western military, dual-use and other critical goods through third countries. The effectiveness of sanctions, particularly against Russia, depends on enforcement. We have seen this week reports that Russian shadow fleet ships could be seized by British special forces after ministers reportedly identified a new legal basis for raids.
Our prediction for 2026 is that, for sanctions to bite, enforcement will target circumvention, third country channels, procurement networks, opaque supply chains, evasion routes, service providers and those enabling Russia’s war economy. A focus is likely to be on UK firms indirectly enabling the movement of restricted goods and dual use items going into Russia via third countries. Russia has demonstrated that it relies on deceptive tactics, such as the use of indirect shipping routes, deliberate falsification of the end-uses of traded goods, and professional evasion networks, to evade sanctions enforcement. It is therefore critical that UK businesses fully determine the extent of their specific sanctions risk exposure, and develop an appropriate set of safeguards and controls tailored to their particular circumstances. This is particularly relevant in the maritime industry and for freight forwarders, carriers, hauliers, logistics providers, dual use distributors, professional service providers and financial intermediaries.
Compliance with UK sanctions law is overseen by a variety of regulators, including the Office of Financial Sanctions Implementation (OFSI), the Office of Trade Sanctions Implementation (OTSI) and HM Revenue & Customs (HMRC). Recent enforcement examples include:
- OFSI taking six enforcement actions in 2025 (compared to a combined total of 10 actions between 2019 and 2024), including making public disclosures of breaches in cases where they did not issue a fine. In 2025, penalties ranged between £5,000 - £465,000. On 26 January 2026, OFSI announced that it had imposed a penalty of £160,000 on Bank of Scotland for making funds available to a designated person without a licence after Bank of Scotland had processed 24 payments to or from a personal account held by a designated person.
- OTSI’s Compliance and Enforcement unit has reported that it received reports or referrals relating to 146 potential breaches of trade sanctions in its first year. OTSI has recently confirmed that while it has not yet imposed any civil monetary penalties, it has a number of investigations underway. OTSI has also referred a significant number of cases to HMRC and other government partners and shared information with international counterparts. OTSI has recently provided guidance on what “good breach reporting” looks like.
- HMRC issuing a record penalty in 2025 of £1,160,725.67 as part of a compound settlement for breaches of UK sanctions against Russia. The breach was in relation to a UK exporter that made goods available to Russia.
- The first successful criminal prosecutions for breaches of UK sanctions laws in April 2025.
The key message is that early and effective due diligence, and managing supply chain sanctions risks, is crucial particularly as violations of sanctions can result in significant fines, reputational harm and even imprisonment. Due diligence record keeping is essential.
