Marking 10 years of OFSI: partnership, progress and the future of financial sanctions At the end of April, OFSI marked its 10th birthday by hosting an international conference on financial sanctions at HM Treasury, bringing together partners from across government, industry and international organisations. Thank you to everyone who attended and contributed to the discussion.
The event reflected on how UK financial sanctions have evolved over the past decade, and the role they play in an increasingly complex global environment. Key themes included: – Our new PERC strategy (Promote, Enable, Respond, Change) and how it is being delivered in practice – The importance of partnerships across government, industry and international allies – The opportunities and risks presented by technological change
Discussions reinforced that sanctions are most effective when delivered collectively, through strong coordination, clear implementation and ongoing engagement.
OFSI published the following blog post about the event:
Marking 10 years of OFSI: partnership, progress and the future of financial sanctions
Lindsey Whyte, Director General for International at HM Treasury, delivering remarks at OFSI10. Picture by Simon Walker / HM Treasury
What does a decade of UK Financial Sanctions look like in practice? At the end of April, to mark its 10th anniversary, OFSI hosted an international conference on sanctions, bringing together partners and stakeholders from across UK government, industry and international allies including the EU, US, Ukraine, Australia, Japan, Canada and the Cayman Islands.
The conference demonstrated OFSI’s ability to convene a cross-sector group of partners, and, as many attendees noted, this created a more distinct forum than is typical. By bringing these partners together in one forum, OFSI had the unique opportunity to set out its new strategy openly, to support practical discussions on the shared challenges facing the sanctions community and pointing towards a clear pathway to strategically address these.
In her address, Lucy Rigby MP, Economic Secretary to the Treasury and OFSI’s lead Minister, emphasised that sanctions are not just about imposing restrictions, they also protect the integrity of the UK’s financial system and help ensure legitimate businesses are not undercut by illicit actors. Describing financial sanctions as an integral part of the UK economy, she underlined their role in supporting national resilience and maintaining the UK’s global reputation. She also pointed to a more complex geopolitical landscape, with links between developments in Russia and the Middle East, and the need to maintain sustained pressure on Russia for its illegal war in Ukraine, while managing wider risks to the global economy. She highlighted the importance of making better use of data and continuing to work collectively as threats evolve.
This direction was echoed by Lindsey Whyte, HM Treasury’s Director General International, and Permanent Secretary James Bowler, who both reflected on the strain on the international order and the central role sanctions now play, which require strong partnerships across government and with industry nationally and internationally.
The evolution and importance of the UK sanctions regime
Over the course of the day, panels explored how the UK’s sanctions framework has evolved and where it goes next. The first session, moderated by OFSI Deputy Director Daniel Drake, reflected on the shift from operating through the EU to delivering an autonomous UK framework. This capability was tested at pace in February 2022, when more sanctions were introduced in a few months than in the previous decade, driving significant change across government and industry.
As Daniel noted, OFSI is now “entering its teenage years” with stronger capabilities, deeper partnerships, and a clear role in delivering national security outcomes.
Across industry and international perspectives, what came through clearly was how much the system has matured. Firms described a shift from basic screening to highly sophisticated, proactive approaches, while international partners highlighted the UK’s credibility across implementation and enforcement. At the same time, the landscape continues to change, with increasing legal complexity, more sophisticated evasion tactics and ongoing pressure to strengthen capability and technology.
Picture by Simon Walker / HM Treasury
The Industry Perspective
The industry panel, moderated by OFSI Deputy Director Beth Davies, offered a candid view of how sanctions are applied in practice. Panellists highlighted the scale of investment firms have made in building sanctions capability, alongside the challenge of operating in a changing environment, where certainty is not always clear-cut and professional judgement is often required. Visible enforcement is seen as critical in shaping behaviour, while continued dialogue between government and industry remains essential, particularly in managing overcompliance and ensuring policy intent is understood.
Partnerships at the core of sanctions delivery
The penultimate panel, moderated by OFSI Director Giles Thomson, highlighted the importance of international partnerships for the effectiveness of sanctions. Speakers from the US, EU and Cayman Islands were clear that sanctions are most effective when applied collectively. Alignment across jurisdictions increases impact, whilst practical cooperation through intelligence sharing and regular engagement underpins delivery. Maintaining this alignment requires constant effort, particularly as new challenges emerge, including dynamic evasion techniques and the growing use of crypto assets.
Looking ahead: the next decade of sanctions
The final panel looked ahead to the future. Speakers focused on how technology will shape the future of sanctions. Advances in artificial intelligence and data are creating new opportunities to strengthen analysis, coordination and decision-making. However, panellists noted the need to be accountable for using these tools carefully, ensuring speed and scale does not come at the expense of sound human judgement. The discussion highlighted a more complex operating environment, where sanctions, anti-money laundering and fraud are increasingly interconnected. The conclusion was clear: rapid technological change will demand that the system modernises ways of working to keep ahead of circumvention and evasion, and to take full advantage of new capabilities to deliver greater impact, without losing the role of human judgement.
How OFSI delivers: PERC in action
A consistent thread running through the day was how the four pillars of OFSI’s new strategy – Promote, Enable, Respond and Change (PERC) – are being delivered in practice.
The licensing spotlight highlighted the importance of enabling legitimate activity whilst maintaining pressure on designated targets, supported by clearer guidance, targeted use of General Licences and a structured prioritisation approach. The enforcement session reinforced the value of visible action in driving compliance, with more targeted investigations and increased publication of outcomes helping to shape behaviour across the system.
Feedback since the event has reinforced the value of bringing together such a broad mix of partners, allowing for what many commented felt like a different kind of conference. The range of perspectives and experience ensured meaningful, open, practical discussions about shared challenges and the future of sanctions throughout the day.
Closing the conference, Director Giles Thomson reflected on both progress across the decade, and the importance of maintaining momentum: “Financial sanctions are, at their core, a collective endeavour. They are only as strong as the system that implements them, and that system only functions because of the people within it. “
The pace of change since 2022 has been significant, but the foundations now in place leave the UK well positioned for the future. Ultimately, the day reinforced a simple point: sanctions are not delivered by any one organisation alone. Their effectiveness depends on the collective efforts of government, industry and international partners and it is that shared effort which will define the next decade as much as the last.
To learn more about OFSI’s strategy and our Promote, Enable, Respond and Change (PERC) framework, read the full document here: OFSI Strategy: 2026 – 2029 – GOV.UK
Ten years ago, the Office of Financial Sanctions Implementation (OFSI) was established to ensure that the United Kingdom’s financial sanctions are clearly understood, effectively implemented and robustly enforced.
Over the past decade, financial sanctions have become an increasingly important tool in furthering the UK’s foreign policy, national security and economic aims. Financial sanctions now operate across a wider range of sectors, markets and jurisdictions than ever before. Their impact, and the demands placed on those responsible for implementing them, are continuing to grow.
Sanctions regimes and designations have expanded, and the scale of our sanctions’ implementation is reflected in recent figures. The OFSI Annual Review 2024-2025 saw £37 billion in assets be reported to OFSI as frozen across all sanction’s regimes.
From the outset, our role has been to ensure that financial sanctions work in practice, enabling the private sector to implement them effectively. That means ensuring measures are targeted and impactful, while minimising unintended consequences for legitimate activity and providing clarity for those required to comply with the rules.
We have strengthened the UK’s financial sanctions framework in several ways. Our engagement with industry has expanded through FAQs, guidance, threat assessments sector-specific advisories and outreach across a wide range of sectors.
Licensing remains a central part of the system, enabling legitimate activity to continue where appropriate while maintaining the integrity of sanctions restrictions. This includes a much-enhanced use of General Licences which has brought greater flexibility and efficiency for both public and private sectors.
Operational capability has also developed significantly, within OFSI as well as by working with law enforcement partners. Case prioritisation processes have been strengthened through greater use of data, helping identify risks and potential breaches earlier.
Since 2023, OFSI has successfully used its powers under the domestic counter-terrorism sanctions regime to designate and disrupt the activity of individuals and entities who pose risks to our national security.
International engagement has expanded, recognising that sanctions operate across borders and require close cooperation and alignment with partners to close loopholes. Legislative changes have strengthened reporting requirements and enforcement powers across the UK framework.
Enforcement has evolved as well. OFSI’s approach is increasingly targeted, intelligence-led and proactive, using a range of tools — including guidance, warning letters, public disclosure and civil monetary penalties — to promote compliance and deter breaches. Proportionate enforcement remains essential to maintaining confidence in the sanctions’ regime.
All this work supports business growth, deters circumvention, and maintains the credibility of the UK’s sanctions framework.
This anniversary is an opportunity for me to recognise the many people who have contributed to the development of the UK’s financial sanctions framework over the past decade. I would therefore like to take this opportunity to recognise the expertise and commitment of colleagues, the many people across government, industry, and international partners, and in particular the OFSI staff past and present, who have helped develop and support OFSI since its establishment.
As OFSI enters our second decade, our focus is firmly forward-looking and will be captured in a new three-year strategy to be published in the coming weeks. In April, we will convene with partners from across sectors at the OFSI10 Conference, where we will reflect back on our journey so far and look ahead to the future.
Ten years on, much has changed. But our mission remains the same: to ensure that the UK’s financial sanctions continue to be clearly understood, effectively implemented and robustly enforced.
OFSI has today published a blogpost, Reasonableness in licensing – updated approach. It provides more clarity on the evidence we require to support licence applications under the legal services and routine holding and maintenance licensing grounds, helping applicants to submit complete, well‑evidenced applications. The blogpost should be read alongside OFSI’s earlier blogpost, Reasonableness in licensing.
The updated guidance:
Reasonableness in licensing – updated approach
In June 2021, OFSI published a blogpost, “Reasonableness in licensing”, which set out how we assess “reasonableness” when considering licence applications under UK financial sanctions regimes.
This blogpost, “Reasonableness in licensing – updated approach”, updates that guidance and applies across all UK financial sanctions regimes.
OFSI regularly receives applications under the legal fees licensing ground which relate to legal services provided on ongoing and complex matters. Some of these applications request permission for payment of fees in the millions of pounds. It is for the applicant to demonstrate to OFSI that the legal fees and expenses they are requesting payment for are reasonable.
To support OFSI’s assessment of reasonableness in these cases, OFSI will now require an independent Costs Draftsperson’s Report (CDPR) to be submitted as part of the licence application in certain circumstances.
Applicants may also choose to provide a CDPR proactively even where the relevant threshold has not been met but there are other factors which increase the complexity of the application. This may assist OFSI’s assessment of reasonableness.
When a CDPR is required
OFSI will require an independent CDPR in the following cases:
Law firms – where within any six-month period:
total legal fees and Counsel fees (where instructed via solicitors), including expenses, to be licensed exceed £2,000,000.00 (inclusive of VAT)
Counsel (instructed directly) – where within any six-month period:
Counsel related costs, including disbursements, to be licensed exceed £1,000,000.00 (inclusive of VAT).
How the thresholds apply
These thresholds:
apply per UK law firm or per Counsel,
are assessed in relation to each designated person, and
are cumulative across all specific licences and applications in relation to that designated person from the law firm or Counsel.
Applications covering periods longer than six months
Where a single licence application covers a period longer than six months, OFSI will apply the relevant threshold pro rata to reflect the length of the period covered.
For example, an application covering 18 months of legal services would have threshold caps of:
£6,000,000 (inclusive of VAT) for a UK law firm (i.e., £2,000,000 per six-month period); and
£3,000,000 (inclusive of VAT) for Counsel (instructed directly) (i.e., £1,000,000 per six-month period).
What to include in your application
When submitting an application, please indicate clearly whether the criteria above apply. For example, you may wish to include a statement such as: “The legal costs exceed £2 million (including VAT) and a CDPR is attached.”
Anticipated (future) costs
OFSI recognises that applicants may seek licences for work already done and also work anticipated in the future. Where legal work is anticipated but not yet incurred, OFSI will accept a CDPR that assesses anticipated costs.
For long-running legal matters, where it is not feasible to obtain a CDPR covering anticipated costs, applicants are encouraged to consider applying for licences on a quarterly basis, with an enclosed CDPR covering costs incurred during the relevant period.
OFSI will seek to help applicants understand the licencing process, including by directing them to relevant guidance.
Disbursements
Where the threshold requiring a CDPR has been met, OFSI may, on a case-by-case basis and in extenuating circumstances, agree to assess disbursements (excluding Counsel fees or other legal services) without the provision of a CDPR separately in advance of the assessment of the wider legal fees element of the application. Examples include where a disbursement must be paid on a time‑critical basis to avoid prejudice to legal proceedings, and the applicant can provide clear evidence for that disbursement even though the CDPR for the wider legal fees is not yet available.
This is at OFSI’s discretion, and applicants should provide clear supporting evidence for the disbursements in question.
Independence and qualification of the Costs Lawyer
CDPRs must be produced by independent practising Costs Lawyers who:
are regulated by, and hold a current practising certificate issued by, the Costs Lawyer Standards Board (CLSB);
comply with the CLSB’s Code of Conduct; and
are not part of the legal team undertaking the work covered by the OFSI licence application.
How OFSI uses the CDPR and assesses reasonableness
A CDPR is one part of the evidential package that OFSI will consider when assessing whether legal fees and expenses are reasonable. We will look at the CDPR alongside other material you provide.
However, even where a CDPR concludes that costs are reasonable, OFSI may still determine that reasonableness has not been fully demonstrated; license a lower amount than requested; or decline to license certain costs altogether.
The costs of obtaining a CDPR may be licensed under the legal services licensing ground, subject to the normal reasonableness test. These costs can be included within the main legal services application or sought via a separate licence application.
You may apply for CDPR costs before you submit the primary application, at the same time as an application, or as a separate application after the primary application has been considered. In all cases, OFSI will assess the CDPR costs in the same way as any other legal fees and reasonableness must be demonstrated.
Legal services: Administrative and other additional fees
OFSI sometimes receives legal services licence applications that include an additional administration or similar fee applied as a percentage uplift to the total of fee earners’ charges.
To assess the reasonableness of any such fee, OFSI requires applicants to provide:
a clear, itemised breakdown of what the administration (or similar) charge covers; and
supporting evidence demonstrating the basis for, and level of, those costs.
Where this information is not provided, OFSI will not be able to assess the fee as reasonable and may refuse to license it. Applicants should therefore provide this information at the outset, as it is likely to enable a quicker assessment.
Maintenance of frozen funds and economic resources licensing ground: independent expert reports
For applications under the maintenance of frozen funds and economic resources licensing ground, applicants are encouraged to submit an independent expert report where the requested payments are high value, novel, or complex. For example, this could be payments related to a niche asset (such as a superyacht or racing car) for which expertise is required to determine the maintenance required; or for extraordinary payments which are not routinely required (for example, significant construction works to prevent a building falling into disrepair).
Where an expert report is not provided, OFSI may on a case-by-case basis and at OFSI’s discretion, request one where it is needed to support our assessment of the necessity and reasonableness of the proposed costs.
Type and qualification of the independent expert
The independent expert should have demonstrable and relevant expertise in the area to which the costs relate. This expertise may be demonstrated through relevant experience and/or appropriate professional accreditation.
Examples include, but are not limited to:
Maritime assets – a marine surveyor or naval architect accredited by a recognised professional body.
Aviation – an aircraft engineer or aviation asset manager with appropriate professional registration.
Technical infrastructure / industrial assets – an engineer with chartered status (or equivalent) in the relevant discipline and experience of maintaining comparable assets.
The expert should:
be independent of the applicant and any service provider benefiting from the payments;
have no financial interest in the proposed works or services, beyond standard professional fees for preparing the report; and
provide a signed report, prepared and presented in line with the relevant professional/industry standards, setting out the basis for their opinion on the proposed costs and their necessity.
How OFSI uses the report and assesses reasonableness
As with CDPRs, OFSI will treat any independent expert report as part of the overall evidential package. Even if the report supports the proposed costs, OFSI may conclude that costs are not fully justified and license a reduced amount or decline certain costs.
Cost of obtaining independent expert reports
As with CDPR fees, the costs of obtaining an independent expert report may be licensed under the relevant licensing ground, subject to the normal reasonableness test. Applicants may include these costs within the main application or request them via a separate licence application.
OFSI will assess the reasonableness of independent expert fees case-by-case, taking account of the scope, complexity, location, and urgency of the works.
To assist OFSI’s assessment, applicants should provide (as applicable):
A clear scope of services: what the expert will do, deliverables, and the time period covered.
How the fee is calculated: whether a fixed fee (and what it covers), or hourly rates and estimated hours (including any fee cap).
Evidence of market reasonableness: multiple quotes/tenders, or an explanation of why a single provider was selected.
Evidence to demonstrate reasonableness
OFSI will continue to assess reasonableness in line with our existing guidance and policy (see Reasonableness in Licensing).
Evidence submitted to demonstrate reasonableness should be recent and as a general rule, OFSI considers evidence dated within the past 6 months to be appropriate (in relation to the application).
Where evidence is older than 6 months, applicants must provide a clear explanation of:
why more recent evidence could not be obtained; and
why the older evidence remains a reliable basis for assessing reasonableness (for example, due to the nature of the market or stability of pricing).
Further information
These updates are intended to enhance transparency around OFSI’s assessment of reasonableness, and to help applicants prepare complete and well evidenced applications. This should support more efficient processing of applications and clearer outcomes.
the relevant regime-specific and thematic guidance on GOV.UK; and
the terms of any applicable General Licences.
If you are unsure how these updates affect your application, you can contact OFSI using the details provided on GOV.UK.
and the original post, from June 2021:
Reasonableness in licensing
If you are applying for a licence from OFSI to release otherwise frozen funds for legal fees or the maintenance of frozen funds or economic resources, you will likely come across the term “reasonableness”.
When issuing a licence to enable the payment of professional fees and expenses for the provision of legal services, OFSI is legally obliged to ensure that those fees and expenses are “reasonable”.
OFSI’s Introduction to licensing blog, which was published in April 2021, set out the key changes to licensing under the Sanctions and Anti Money Laundering Act (the Sanctions Act) that came into effect from 23.00 on 31 December 2020. The following changes to reasonableness now apply:
Under the legal fees licensing ground, reasonableness now also applies to expenses
A reasonableness test has been applied to the maintenance of frozen funds and economic resources licensing ground.
OFSI receives many applications where applicants have not provided sufficient evidence of reasonableness or with no evidence at all. This could be because the applicant may not understand the full policy intention behind the regulations that need to be considered in parallel, or the justification submitted may be one-sided in the applicant’s favour. However, OFSI requires a significant level of evidence when scrutinising the reasonableness threshold. This is because the Sanctions Act which gives us the power to issue these licences, also stipulates that legal fees and maintenance of frozen funds should be ‘reasonable’. When we don’t receive the level of detail that we need, we will need to engage with the applicant for these further details. This can invariably cause delays in processing such licence applications and, in some cases, may result in the refusal of the licence application if further information is never provided. OFSI does not want to cause delays to the consideration and issuance of any of our licences, so this blog is aimed at setting out what information we need to consider when identifying if an application is “reasonable”.
Financial sanctions are a foreign policy tool. In the UK they are implemented through UK legislation (which sometimes applies restrictions imposed through the UN) in order to achieve a specific foreign policy or national security objective. Financial sanctions are generally imposed to:
coerce a regime or individual to change their behaviour;
constrain a target by denying access to key resources to continue their offending behaviour;
signal disapproval; and
protect the value of assets that have been misappropriated from a country until these assets can be repatriated.
As the competent authority for the implementation of financial sanctions in the UK, OFSI has to ensure that any permitted release or use of frozen funds maintains the integrity of the financial sanctions regime, supports the foreign policy ambition and that the decision to release remains in line with its legal duty under UK law. The term ‘reasonable’ is written in to the Sanctions Act which means there is a legal requirement both for OFSI to assess this and for applicants to provide evidence of why a payment is reasonable.
If you are in possession of an OFSI licence that permitted the use of frozen funds for the payment of legal fees/maintenance under the previous EU regulations, you may need to provide a new explanation for reasonableness, if that licence requires an amendment. In addition, if you were granted a licence that has now expired after only being partially used, or not used at all, any new application will need to meet the new requirements as set out under the Sanctions Act for the regime. This should include explaining and/or evidencing the reasonableness of the payments. Licence extensions under derogations that have reasonableness written into them will need to undergo ‘reasonableness’ assessments again. This can be done by providing evidence such as previous invoices against the licence to assist OFSI in its determination that the costs remain reasonable and whether all of the licence is being used in the same way that it was when the licence was initially granted.
The two licensing derogations under the Sanctions Act that include a ‘reasonableness’ test are ‘legal services’ and ‘maintenance of funds or frozen resources’. We have broken them down below and have outlined the types of questions that applicants may wish to consider when applying under these specific licensing grounds.
Legal Services
It is for the applicant to demonstrate to OFSI that the legal fees and expenses they are requesting payment for are reasonable. OFSI considers that the Solicitors’ guideline hourly rates or the sums that could be expected to be recouped if legal costs were awarded following civil court proceedings, provide a useful starting point for assessing the reasonableness of legal fees and expenses. If you seek fees of a level above those set out in the guideline, you need to demonstrate why those increased fees are reasonable in the given case. Whilst we will consider rates that vary from the guideline, it is a useful benchmark in the assessment of reasonableness.
When applying to for a legal fees and expenses licence, you should consider addressing the following in your application form:
Whether the work has already taken place or if it is anticipated work;
What the work will involve/has involved;
Which fee earner(s) will be/have been involved in the work (and their position(s)/role(s) within the firm, including relevant level of experience);
The fee earner(s)’ hourly rate;
How many hours each fee earner(s) will be estimated to spend/has already spent on each workstream;
Any supporting evidence as to why the involvement and/or the number of hours of the particular fee earner(s) is reasonable and/or proportionate to the nature and complexity of the work;
Any expenses that are expected and have been paid out; and
If any expenses are expected, why are they necessary.
If you are requesting a licence amendment to permit an increase in the hourly rate of fee earner(s) you should provide a detailed explanation. For example, this may be a breakdown and evidence of the firm’s running costs to explain the proposed increase. When OFSI reviews such amendments, it is not enough to cite for example, “an engagement letter between the DP and the law firm” which provides for an annual increase, nor that it is a “common practice amongst law firms”. As set out in OFSI’s guidance, legal services may be provided without a licence, but any payments for legal services provided, do require a licence.
In terms of legal professional privilege (LPP), OFSI expects legal professionals to carefully ascertain whether LPP applies and which information it applies to. It is not generally considered that fees notes and narratives of work (in generic terms) are privileged as they do not constitute the giving or obtaining of legal advice. OFSI may challenge a blanket assertion of LPP where it is not satisfied that such careful consideration has been made. For example, simply providing the cost of a workstream without providing a breakdown due to LPP is not satisfactory. This is because OFSI is unable to undertake a reasonableness assessment without having a breakdown of the individual legal cost for each area of work.
Maintenance of funds and frozen resources
Under the derogation of ‘Maintenance of funds and frozen resources’, licences may be issued for a number of purposes. These can range from the supply of Covid-related personal protective equipment, to property maintenance. When a licence application or amendment request is submitted under this derogation, sufficient evidence will need to be included for OFSI to make a decision. When applying, you should consider the following in your application form:
Provide evidence when submitting your licence application. Appropriate evidence will vary based on what you are applying for.
Explain why the proposed activity is necessary. You may wish to explain what the outcome would be should you not receive a licence.
Where appropriate, consider obtaining quotes from more than one supplier to ensure that the fees can be demonstrated as reasonable and that you are receiving value for money.
If a quote is unable to be obtained, provide an evidence-based estimate. If you are a property management company looking to obtain a licence for a commercial building, you may wish to use quotes from similar-sized commercial buildings as evidence for reasonableness.
Provide a breakdown of the proposed payment/work. If you are requesting a licence to pay £100,000 for a change of windows, provide a breakdown of the payment – this could include the exact number of windows you are looking to change, cost of personnel and/or material etc.
If you are applying for a licence extension, you will be required to undergo the reasonableness assessment again. This may include reviewing your licence to ensure it is being used.
For any applicant that is submitting a licence application under a derogation that has ‘reasonableness’ written in to the regulations, you should use your own best judgement and not assume OFSI understands the process and practice of the profession when providing your response. We understand that reasonableness may have different meanings in different contexts and applicants should note that just because a payment has been licensed on a previous case, does not automatically mean that it will necessarily be licensed again. This is why OFSI considers each application on a case by case basis and the above pointers serve as a guideline of best practice when engaging with us.
For further information on licensing and financial sanctions implementation, please refer to OFSI’s general guidance.
Today, OFSI published the following blog post about how it prioritizes licensing applications:
How OFSI Prioritises Licence Applications
OFSI remains committed to a transparent, fair and effective licensing process. Publishing this prioritisation framework is part of our continuing efforts to ensure that applicants understand how we assess cases and what they can do to support timely decision‑making.
OFSI receives a wide variety of licence applications each year, ranging from urgent humanitarian requests to complex commercial transactions. In the financial year 2024-2025, OFSI took over 900 licensing decisions. It is not possible to deal with all applications as soon as they are received. Publishing our prioritisation framework aims to help applicants understand how OFSI manages competing demands and how applications are prioritised.
Each licence application is assessed against seven criteria as set out below. These criteria help caseworkers understand urgency, risk, stakeholder impact and possible harm caused by delay. Applications are then categorised as high, medium or low priority.
While the framework provides structure, OFSI caseworkers continue to use professional judgement and may adjust prioritisation where circumstances require a different approach. Additionally, even if a licence application is prioritised as urgent, complexities may mean it still takes time to complete. Applicants should therefore submit licence applications well in advance of when they are needed, wherever possible.
The Criteria
1. Nature of the licensing purpose
Humanitarian applications, basic needs, or anything where delay could significantly affect access to justice (i.e. where there are court dates which must be complied with) are generally treated as high priority.
Generally, you won’t be prohibited from providing legal advice under an asset freeze. However, the payment for legal services and the provision of legal services on credit do require an OFSI licence. On that basis, applications may not immediately be considered as a high priority. OFSI has issued a Legal Services General Licence to allow payments for legal fees within certain limits and under certain conditions. It is recommended that you consult the Legal Services General Licence prior to an application to OFSI to determine whether that General Licence would be applicable to you.
2. Materiality to the applicant or affected parties
OFSI assesses how significant the application is in real terms. This includes the applicant’s circumstances, the size of the transaction relative to their means, and whether delay would result in economic loss.
3. Timing considerations
Applications may be prioritised where a decision is genuinely time‑sensitive, where delays would cause harm, or where the application has already been outstanding for a significant period.
4. UK economic impact
Applications that may affect UK jobs, business continuity or wider economic welfare may be prioritised.
5. Administrative impact on OFSI
Some cases may affect OFSI’s ability to progress other applications — for example, those forming part of a series of related applications.
6. Reputational or strategic impact
Applications may be prioritised where delay could undermine confidence in the UK sanctions regime, affect relationships with key partners, or have significant implications for foreign policy, national security or energy security.
7. Complexity of the application
Complex or precedent‑setting cases may require more time and scrutiny. These may be prioritised to ensure consistent and robust decision-making. However, even when a case is prioritised in accordance with this criterion, an application may still take time to complete.
How the criteria work in practice
High‑priority cases generally meet at least two of the criteria at a high level -humanitarian cases, or cases where a risk to life has been demonstrated, are almost always classified as high priority. Medium‑priority cases demonstrate a moderate level of impact across several criteria. Low‑priority applications generally show limited impact in most areas.
Caseworkers may adjust priority where individual circumstances justify doing so.
These criteria only assist in the prioritisation of applications and do not create an automatic right to priority or expediency. The outcome of this assessment does not affect the outcome of the application and there may still be a number of applications which have been categorised with the same urgency.
How applicants can support the process
Applicants can help OFSI process their applications more efficiently by submitting clear, complete and well‑evidenced information. Here are some steps that will help:
Provide a clear legal basis
Applicants should set out the specific licensing ground that applies and explain how their circumstances meet it.
Include all required information upfront
Missing or unclear information is one of the most common causes of delay. Applicants should provide evidence of urgency, where applicable, to assist in the prioritisation of applications.
Avoid repeat or speculative applications
Submitting an application again without new information, or submitting entirely speculative applications “just in case”, may delay processing and is unlikely to result in the case being prioritised as high priority. You may wish to seek legal advice in advance of making an application and check whether any General Licences apply to your situation.
Highlight genuine deadlines
Where a deadline exists—such as a court date or risk of hardship—applicants should clearly explain and evidence this in their application.
Use OFSI’s online application form
Using OFSI’s online application form will ensure that cases are received by the correct team as early as possible and could prevent any additional delays
OFSI is unable to provide legal advice to applicants and if you are in any doubt, you should seek independent legal advice in relation to the matters raised. You may also wish to consult OFSI’s other guidance products, such as:
The lessons in this case go beyond one bank and one customer. OFSI’s published outcomes demonstrate how OFSI assesses breaches, the circumstances surrounding them, and how weaknesses in screening, escalation and training are taken into account when breaches have occurred. These lessons can help firms better understand how to run sanctions controls in practice, and how weaknesses in screening, escalation and training can expose firms to the risk of breaching.
UK financial sanctions apply to any conduct in the UK and to all UK persons (including UK legal entities) anywhere in the world.
Lesson 1: Screening data and configuration really matter
OFSI strongly encourages firms to utilise all information available to them to optimise sanctions controls relative to their risk. Firms are advised to assess and employ appropriate resources to enhance the effectiveness of such systems.
In this case, Lloyds Banking Group had taken measures to implement sanctions screening. However, its automated sanctions systems failed to detect a spelling variation of a designated individual’s name.
What this means for you:
Ask whether your screening can cope with spelling and transliteration variants.
Where your risk justifies it, consider enriched screening and commercial list providers alongside the new UK Sanctions List.
Lesson 2: Automation is not a safety net
This case illustrates that there are inherent risks associated with automated sanctions screening. It is essential that firms establish robust and explicit contingency procedures.
Internal policies should provide robust and explicit guidance to staff regarding the escalation of potential sanctions concerns. This is particularly pertinent for areas of business that are more exposed to sanctions risk, such as those involving Politically Exposed Persons (PEPs).
What this means for you:
Make sure front‑line teams know when to escalate, who to contact and how – not just that they “should escalate”.
Lesson 3: Training must match today’s sanctions landscape
The sanctions landscape has evolved significantly since the Russian invasion of Ukraine in February 2022, and continues to develop with ever-shifting geopolitical events. It is imperative that all training and associated materials relating to sanctions are regularly reviewed and updated.
What this means for you:
Training content must be regularly reviewed and updated to accurately reflect relevant regulatory and geographical developments to ensure continued compliance.
Lesson 4: Voluntary disclosure can shape the outcome
This case is an example of prompt, voluntary disclosure of a potential breach. Lloyds Banking Group, on behalf of Bank of Scotland, made an initial notification within two weeks of identifying a potential breach. OFSI seeks to reward prompt and complete voluntary disclosures through penalty discounts, which alongside co-operation can result in a discount of up to 30% under new guidance.
What this means for you:
You should report suspected breaches to OFSI as soon as practicable.
Where full disclosure is not possible, a person should make an early disclosure with partial information on the basis that they are still working out the facts and will make a further and full disclosure as soon as possible.
Reporting breaches protects the integrity of financial sanctions and assists government and law enforcement agencies in tackling serious crime.
What firms should do next
This case shows that OFSI is focused not only on whether firms have sanctions controls, but on how effectively those controls operate in practice. From the way screening data is configured, to how concerns are escalated, how often training is refreshed, and how quickly potential breaches are reported.
Firms with UK touchpoints, including those operating internationally, should:
review their sanctions screening, escalation procedures and training considering these lessons
ensure they understand and comply with their reporting obligations, including reporting “as soon as practicable” where required.
