Call for evidence on ownership and control in financial sanctions regulations

OFSI has launched a call for evidence to seek industry’s views on how UK financial sanctions regulations on ownership and control are applied in practice, including how firms implement the regulations and where they face challenges.   

The ownership and control test is designed to stop sanctioned individuals and entities from sidestepping UK sanctions by hiding behind complex company structures, trusts or proxies. However, industry representatives report to OFSI that assessing the ability of a designated person to control an entity – even if they are not actively doing so – can be difficult in practice and may create additional costs and legal risk. 

We are therefore asking firms, representative bodies and other interested stakeholders to share evidence and practical examples of: 

• How often ‘hypothetical control’ is present in real financial sanctions cases; 

• The impact it has on compliance costs, legal risk and business decisions (including derisking); 

• Whether existing legal concepts and typologies of control are helpful in applying ownership and control regulations.  

This information will help us understand whether the current approach is as clear, effective and proportionate as it should be, so that sanctions remain tough on those they target while being workable for legitimate businesses. 

The Call for Evidence is open until 13th April 2026. 

The Call for Evidence page:

Open call for evidence

Ownership and Control Test in UK Financial Sanctions Regulations

From: Office of Financial Sanctions Implementation

Published 16 February 2026

Summary

Ownership and Control Test in UK Financial Sanctions Regulations

This call for evidence is being held on another website.

This call for evidence closes at 11:59pm on 13 April 2026

Call for evidence description

HMG is launching a call for evidence to seek industry’s views on how UK financial sanctions regulations on ownership and control are applied in practice, including how firms implement the regulations and where they face challenges.   

We are asking firms, representative bodies and other interested stakeholders to share evidence and practical examples of: 

• How often ‘hypothetical control’ is present in real financial sanctions cases; 
• The impact it has on compliance costs, legal risk and business decisions (including de-risking); 
• Whether existing legal concepts and typologies of control are helpful in applying ownership and control regulations.  

This information will help us understand whether the current approach is as clear, effective and proportionate as it should be, so that sanctions remain tough on those they target while being workable for legitimate businesses. 

How to respond

OFSI is keen to hear from a wide range of stakeholders in response to the consultation, including businesses, financial institutions, legal and compliance professionals, civil society and other interested parties.  

This Call for Evidence goes live on Monday 16^th February 2026 and will be open for eight weeks. Responses will be accepted until 11:59pm on Monday 13^th April 2026. 

Responses are encouraged via the online form.

If you cannot respond via the online form, you may send your response by email to oc-callforevidence@hmtreasury.gov.uk 

Please state whether you are responding as an individual or representing the views of an organisation, business, or representative body.

Privacy notice

Click here to view the privacy notice for the call for evidence, which sets out how HM Treasury will use your personal data and explains your rights under the General Data Protection Regulation (GDPR) and the Data Protection Act 2018 (DPA).

The Call for Evidence PDF:

There’s an HTML page, too.

Finally, OFSI wrote a blog post:

Call for evidence on ownership and control in financial sanctions regulations

OFSI, 16 February 2026 – OFSI Blog

OFSI has launched a call for evidence to seek industry’s views on how UK financial sanctions regulations on ownership and control are applied in practice, including how firms implement the regulations and where they face challenges.   

The ownership and control test is designed to stop sanctioned individuals and entities from sidestepping UK sanctions by hiding behind complex company structures, trusts or proxies. However, industry representatives report to OFSI that assessing the ability of a designated person (DP) to control an entity – even if they are not actively doing so – can be difficult in practice and may create additional costs and legal risk. 

This information will help us understand whether the current approach is as clear, effective and proportionate as it should be, so that sanctions remain tough on those they target while being workable for legitimate businesses. 

Background  

The policy intention of the UK government’s approach to ownership and control (O&C) in UK sanctions regulations is to ensure that sanctions cannot be easily circumvented. The two-condition O&C test set out in legislation (e.g. Regulation 7(4) of The Russia (Sanctions) (EU Exit) Regulations 2019) serves as a critical safeguard against sanctions circumvention, by ensuring that entities owned or controlled by a DP are subject to financial sanctions, even if not explicitly named on the UK Sanctions List. In particular, the second condition of that test (also referred to as ‘the control test’) is broadly drafted to capture as much activity as possible. 

 We have repeatedly heard from financial and legal representatives that they face challenges when implementing O&C provisions, with particular emphasis on the degree of uncertainty of the control test and the potential for multiple and sometimes conflicting interpretations. Firms have told OFSI that determining when these situations constitute control for sanctions purposes can be challenging and that it is not always clear what evidence should be reasonably sought to support these assessments. 

In response to industry feedback, HM Government committed to delivering measures to provide further clarity on ownership and control as part of the Review of Sanctions Implementation and Enforcement, published in May 2025. We are therefore launching a call for evidence on how the UK’s O&C test is applied during financial sanctions compliance. We want to hear from those who apply the test about where it works well, where challenges arise and the practical impacts of these assessments. Formal evidence across these areas, in addition to anecdotal evidence already held by OFSI, will help form a comprehensive picture of how implementation works in practice.  

The call for evidence focuses on control as a direct response to industry feedback, which has highlighted greater implementation challenges associated with the control element of the O&C test rather than the ownership element. On ownership, HMG continues to actively explore options to respond to calls for greater alignment with international partners, including adopting an aggregation model and amending the 50% ownership rule to “50% or more,” in line with the EU and US sanctions frameworks.   

Why we are calling for evidence 

Under UK financial sanctions, a DP is subject to an asset freeze. The regulations also apply to entities that designated persons own or control.  

An entity is owned or controlled directly or indirectly by another person in any of the following circumstances:  

• The person holds more than 50% of the shares or voting rights in an entity.  
• The person has the right to appoint or remove a majority of the board of directors of the entity.  
• It is reasonable, having regard to all the circumstances, to expect that a DP would (if  they chose to) be able, in most cases or significant respects, by whatever means and whether directly or indirectly, to achieve the result that affairs of an entity are conducted in accordance with that DP’s wishes.   

Evidence presented that the DP has not exercised control does not mean they do not have the ability to do so and therefore does not necessarily refute a DP’s control over an entity. This may be referred to as a DP’s hypothetical ability to exercise control, or simply ‘hypothetical control.’  If a DP can continue to move money or operate through others, the impact of sanctions is weakened. The O&C test helps ensure that sanctions bite on the real economic interests of DP. 

At the same time, firms need regulations they can apply in a clear and proportionate way. Uncertainty can mean operational delays while investigations are conducted, higher costs to ensure compliance and de-risking behaviour, where firms may exit contracts or avoid new business relationships to avoid breaching sanctions. 

This call for evidence will help us understand those pressures by gathering evidence on these issues in a structured way. It will build a picture of how firms and practitioners are currently interpreting and applying the test, which aspects of the ownership and control test cause the most difficulty and the practical impacts – including on costs, timing and business decisions. Our aim is to build a concrete, evidence-based picture of practice, rather than relying on anecdote.  

Scope of the call for evidence 

It is important to be clear about scope. The call for evidence does not invite comment on whether ownership and control rules are desirable as a matter of policy. Instead, we are asking for evidence across the following areas: 

• Chapter 2 examines the prevalence and nature of hypothetical control in financial sanctions, including how frequently this form of control is encountered and in what contexts.  
  We are seeking evidence on its significance in the application of financial sanctions. 
   
• Chapter 3 explores the practical challenges and ease of implementation associated with the control test.  
  This chapter has a particular focus on the assessment of the hypothetical element of the test and the financial impact of compliance and implementation. 
   
• Chapter 4 considers the practical utility of control typologies as a tool to assist with assessing the hypothetical element of the control test for financial sanctions.  
  This includes, in particular, the typology of control set out by Deputy Judge Nicholas Thompsell in his ruling on Kevin Hellard & Ors v OJSC Rossiysky Kredit Bank & Ors. 

We are particularly interested in concrete examples (anonymised where necessary) that show the realities of sanctions compliance and welcome evidence from any organisation or individual involved in sanctions implementation.  

How to respond 

The call for evidence is open until 13^th April 2026.  

Read the full call for evidence and how to respond here: https://www.gov.uk/government/calls-for-evidence/ownership-and-control-test-in-uk-financial-sanctions-regulations