OFSI's Strategy 2026-29: Key Takeaways

The Office of Financial Sanctions Implementation (“OFSI”)’s new strategy sets out its framework and commitments for 2026-2029, highlighting a proactive approach to UK financial sanctions compliance and enforcement. 

In April 2026, OFSI published its Strategy paper outlining its ambitions and agenda for 2026-29 (the "Strategy").

The Strategy, which is framed around the guiding principles of Promote, Enable, Respond, and Change ("PERC"), highlights OFSI's enforcement record and plans over the next three years, including, at a high-level, investing in AI-assisted technology across its enforcement, licensing and intelligence functions, promoting greater engagement with industry, law enforcement and wider partners, and providing greater clarity on timeframes for licensing and enforcement decisions. This article examines the key elements of the Strategy together with practical implications for businesses. 

Context and enforcement trends

OFSI was set up in 2016 to implement and enforce financial sanctions in the UK, as well as to issue general and specific licences for activities that would otherwise be in breach of financial sanctions. 

The Strategy, which has been published to coincide with OFSI's tenth anniversary, notes that the scale and complexity of OFSI's mandate have fundamentally transformed, particularly since Russia's invasion of Ukraine in February 2022, which resulted in a large number of designations and a breadth of complex and novel sanctions measures being imposed in the UK (e.g. the Russian oil price cap). The Strategy also notes that during that time, OFSI's domestic function has expanded, with OFSI designating individuals and entities under the UK's domestic counter-terrorism regime for the first time in 2023.

This has resulted in an increase in enforcement activity between 2021-2025. In particular, OFSI has:

• progressed over 1,400 enforcement cases, issued 18 public enforcement decisions and imposed monetary penalties exceeding £22 million (£20.5m of that in relation to one penalty);
• issued over 100 General Licences; and
• designated seven individuals and five entities since 2023 in support of domestic security objectives.

The Strategy includes data illustrating the trajectory of OFSI's enforcement caseload between 2021 and 2025. The figures show a marked increase in enforcement cases in 2022-23, as might be expected amidst the onset of UK sanctions against Russia – and sustained high volumes (almost 400) through 2023-24 and 2024-25. Licensing decisions followed a similar upward trajectory, peaking in 2022-23 before stabilising at elevated levels. Financial sanctions listings also grew substantially over the same period (now more than 4,000).

Other developments include merging OFSI's Consolidated List of sanctions designations with the Foreign, Commonwealth and Development Office's ("FCDO") UK sanctions list, to create a singular list, and launching a 2025 consultation on OFSI's enforcement powers. 

Internationally, OFSI also seeks to deepen its partnerships with key counterparts including the US Office of Foreign Assets Control, which has seconded officials to OFSI, and which aims to facilitate close cooperation on guidance, enforcement and circumvention risk. The Strategy notes OFSI's active role in G7, FATF and Financial Stability Board forums, shaping global implementation standards and sharing UK operational learning.

As part of its approach to strengthen its enforcement functions, OFSI also recently published its updated Financial Sanctions Enforcement and Monetary Penalties Guidance, providing greater clarity in its case assessment framework and introducing three new discount schemes (see our separate post for further information).

PERC framework

A centrepiece of the Strategy is the PERC framework, with each pillar accompanied by specific commitments and published Key Performance Indicators ("KPIs") against which OFSI will monitor progress via its annual review reporting. Under the framework, OFSI intends to carry out the following:

• Promote: make sanctions rules, risks, and expectations clear so that compliance is the best option and non-compliance is "visibly costly". It includes publishing clear, concise guidance including enforcement communications showing what non-compliance looks like and how to avoid it, working with other regulators and enforcers to ensure a joined-up approach, deepening international alignment including with the US, EU, G7/G20/FATF partners and the Crown Dependencies and Overseas Territories. KPIs include sector-specific engagement campaigns, and delivering joint or co-branded public output with international partners every quarter.
• Enable: focus on removing friction for legitimate activity and ensuring firms can comply "at pace, first time." OFSI will encourage early engagement from firms, provide practical compliance advice on complex scenarios, and maintain a fully effective licensing offer with high, publicised service standards. A significant commitment is the adoption of modern, digital-by-default engagement — including online services, reporting and forms — and the deployment of AI-enabled workflows to enhance services and anticipate risk. The headline KPI is that 50% of licensing cases closed will be completed within six months.
• Respond: focusing on evidence-led case prioritisation and deploying the full toolkit (e.g. settlement, fixed monetary penalties, reporting requirements, referrals, counter-terrorism designations and preventative actions) across financial sanctions. It also includes defending litigation, and working with UK regulatory and law enforcement partners to ensure complementary action. The headline KPI is that 90% of new enforcement investigations are to be submitted for decision within 18 months of commencement.
• Change: OFSI aims to use feedback loops — drawing on real-world experiences and learning from industry and government partners — to shape guidance and lessons learned. It will work with the FCDO and international counterparts to ensure new and updated sanctions enable practical implementation, and will deploy AI-enabled workflows to make the most of the data it holds and collects. The Change KPIs mirror those under Respond.

Commentary

The Strategy reflects OFSI's short-term priorities and ambitions, against a backdrop of heightened geopolitical complexity, an expanding sanctions landscape and increasing regulatory expectations on firms. Businesses should take note of the following points.

Firstly, the enforcement risk profile has increased. Enforcement cases remain relatively high, with OFSI imposing several monetary penalties and disclosure notices in the past few years. This is unlikely to subside given the capacity-building efforts by OFSI, ambitions to strengthen international and domestic partnerships and the focus in its new enforcement framework on resolving investigations more quickly, for example via the early settlement scheme. Firms that engage early, cooperate and self-report about breaches and are transparent about their risks, are more likely to be invited to settle early, or be awarded a discount, than those that do not.

Secondly, OFSI's signalled intent to invest in technology and embed AI-enabled workflows across its intelligence and enforcement functions may result in more breaches and circumvention activity being identified, albeit the details of this initiative are uncertain. The commitment to “digital by default” engagement (i.e. using data and data sharing to improve services) should, in principle, also provide faster licensing decisions which, if delivered, could reduce the compliance burden on firms and provide greater certainty in complex transactions.

Thirdly, OFSI's ambition to provide greater clarity on its rules and sector-specific guidance for industry and targets for processing applications will likely be welcomed by many businesses, given the uncertainty surrounding processing times and lack of sector-specific guidance with sufficient granularity. Until now, the lack of a target for licensing decisions stood in contrast to other bodies including the Export Control Joint Unit (which is responsible for trade sanctions licensing), which had set itself annual targets to provide a decision to 70% of export controls licences within 20 working days. A target of 50% of licensing decisions being completed within 6 months will no doubt provide a useful metric against which to measure OFSI's performance. 

Lastly, the Strategy provides a roadmap for how enforcement, licensing and compliance expectations will likely evolve over the next three years. OFSI should no longer be viewed as a nascent regulator but a more proactive, and assertive body, working in tandem with domestic and international partners, with more defined benchmarks to measure its performance and which has signalled greater willingness to engage with industry. 

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