On 14 December 2023, HM Treasury's Office of Financial Sanctions Implementation ("OFSI") published its Annual Review for the 2022-23 financial year (the "Annual Review"). As expected, the Annual Review predominantly focuses on the UK sanctions imposed against Russia following its invasion of Ukraine in February 2022. However, the publication also provides an overview of the other work OFSI has carried out in respect of other regimes during the 2022-23 financial year. Our key takeaways from the publication are detailed below.

The Russian sanctions regime

The prohibitions imposed in relation to Russia comprise some of the most severe sanctions the UK has ever imposed on any major economy, leading to OFSI reporting in its Annual Review that, as of 31 March 2023, 90% of the Russian banking sector had been sanctioned as well as 130 oligarchs and family members, with a combined net worth of approximately £145 billion. The Annual Review confirms that 653 persons (574 individuals and 79 entities) were designated under the Russian regime for the purposes of the asset freeze.

As of October 2023, OFSI announced that a cumulative total of £22.7 billion worth of Russian assets had been reported as frozen since the beginning of its invasion of Ukraine in February 2022. The total value of these assets will have since depreciated as a result of several factors including the depreciation of traded equity instruments since reporting the frozen holdings to OFSI. Consequently, as of 30 September 2022 (when the most recent review of frozen assets was conducted), £8 billion of Russian funds had been reported as being held by UK firms. This value forms part of the total £21.6 billion of funds which have been frozen as a result of UK financial sanctions across the world – an increase of £9.2 billion since 2021 (the majority of those total UK frozen funds continue to relate to the Libya sanctions regime).

Looking ahead, the Annual Review states that OFSI is focussing on continuing to make a meaningful impact on the ongoing conflict in Ukraine for the 2023-24 period, with the Annual Review being published on the same day as the UK government published a further package of sanctions, including a ban on the export of a range of goods carrying a risk of military or industrial usage that could support Russia's war effort. The new legislation (which can be found here and here) also follows the announcement of the Office of Trade Sanctions Implementation which will assist OFSI's efforts in targeting companies evading Russian sanctions. Our blogpost on these developments can be found here.


According to the Annual Review, 2022 to 2023 was also a "landmark year" for OFSI's Licensing Unit with decisions having been taken on 503 cases (up from 170 in the previous reporting period). A total of 311 licences were issued, 60% of which were in relation to the Russian regime. OFSI also report that 28 General Licences had been issued in the Annual Review period, compared to 16 in the previous financial year.


Following the introduction of the Economic Crime (Transparency and Enforcement) Act 2022, OFSI can now impose civil monetary penalties for financial sanctions breaches on a strict liability basis (i.e., there is no longer a requirement to show that a person had knowledge/reasonable cause to suspect they were in breach). This enhanced enforcement power only applies in respect of breaches occurring from 15 June 2022 onwards. Whilst there has been significant interest in the circumstances in which OFSI will issue fines of this type, the Annual Review does not shed light on this point – as only two monetary penalties were issued by OFSI during the 2022-23 Annual Review period, and both of these related to events which pre-date June 2022. These were small cases, with a combined value of £45,000.

The Annual Review does note, however, that OFSI is currently undertaking "a large number of complex investigations" into Russian sanctions breaches which it anticipates will lead to public enforcement action in the future.

The Annual Review contains a series of other OFSI enforcement statistics for the 2022-23 financial year:

  • OFSI recorded 473 suspected breaches of financial sanctions – up from 147 cases recorded in 2021-2022.
  • OFSI issued seven warning letters in response to confirmed breaches that OFSI did not consider warranted public enforcement action.
  • 51 cases were closed with no further action (44 of which related to Russia related sanctions breach reports).
  • As of April 2023, OFSI's Enforcement Unit had 172 cases under live investigation, many of which remain ongoing today.

In light of the scrutiny OFSI is facing for its lack of sanctions enforcement, OFSI's Director, Giles Thomson, stated in the Annual Review that the body is "transitioning to a proactive enforcement model". The sanctions community will therefore be watching closely to understand whether OFSI's increased powers and the extensive sanctions in place against Russia will give rise to an uptick in enforcement activity in the coming months.

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