OFSI General Guidance for Financial Sanctions
- Issuing authority
- Office of Financial Sanctions Implementation (OFSI), HM Treasury
- Effective date
- Last major update August 2022; ongoing notices and FAQs through 2026. Regularly updated by OFSI
- Scope
- United Kingdom
Key requirements
The UK's sanctions rulebook post-Brexit. OFSI (Office of Financial Sanctions Implementation) is part of HM Treasury and runs the UK's autonomous sanctions regime, separate from EU and US sanctions. Covers asset freezes, the consolidated list of designated persons, licensing for permitted activities and reporting obligations for firms that hold or deal with frozen funds.
Quick Summary
The OFSI General Guidance explains how financial sanctions work in the UK and what businesses need to do to comply with them. It covers topics such as asset freezes, reporting obligations, licences, and the UK's Consolidated List of sanctioned individuals and organisations. Although it is guidance rather than legislation, it plays an important role in helping firms understand and meet their legal sanctions obligations.
What is it?
UK's practical handbook for financial sanctions. It explains how sanctions should be applied, what businesses need to do if they identify a sanctioned person or frozen assets, and when firms may need a licence from OFSI to carry out activities that would otherwise be prohibited.
Who does it apply to?
- Banks
- Payment institutions
- Electronic money institutions
- Investment firms
- Insurance companies
- Cryptoasset businesses
- Lawyers
- Accountants
- Trust and company service providers
- AML and compliance professionals
- Anyone subject to UK financial sanctions obligations
Why does it matter?
Financial sanctions are an important tool for protecting national security and preventing financial crime. Firms are expected to identify sanctioned individuals and organisations, stop prohibited transactions, freeze assets where required, and report certain information to OFSI. Failing to comply can result in significant financial penalties or criminal prosecution.
What should firms do?
- Screen customers and transactions against the UK Consolidated List.
- Put controls in place to identify and freeze the assets of sanctioned persons where required.
- Report frozen assets and suspected sanctions breaches to OFSI when required.
- Train staff on UK financial sanctions obligations.
- Keep sanctions screening systems and customer information up to date.
- Monitor changes to UK sanctions regulations and OFSI guidance.
AboutAML Breakdown
AML rules help prevent criminals from using the financial system. Financial sanctions, on the other hand, prohibit dealing with specific people, organisations, countries, or activities identified by the UK government. Firms should understand that OFSI can impose civil monetary penalties on a strict liability basis. This means OFSI has the power to fine a firm even if it did not know, and had no reasonable cause to suspect, that it was dealing with a sanctioned person. In practice, OFSI considers a range of factors when deciding whether to take enforcement action, including the firm's compliance systems, voluntary disclosures, and cooperation. This is why effective sanctions screening and strong internal controls are so important. Many firms also have a legal duty to report sanctions-related information to OFSI. If they know or have reasonable cause to suspect that they hold frozen assets or have identified a sanctions breach, they may be required to report this without delay. Failing to meet these reporting obligations can itself be a criminal offence. These rules also apply to cryptoassets. OFSI treats cryptoassets as funds or economic resources, meaning cryptoasset businesses may be required to freeze crypto wallets linked to designated persons and report them to OFSI.