OFSI Updates Financial Sanctions Framework

On 9 February 2026 the Office of Financial Sanctions Implementation (OFSI) issued updated guidance on financial sanctions enforcement and monetary penalties. The guidance, which follows a public consultation in 2025, highlights a number of changes in OFSI's approach to enforcement.

Of the various changes outlined in the guidance, the most notable reforms include:

• Introduction of a new Assessment Matrix:  OFSI have sought to clarify how sanctions cases will be assessed. A new four-tier model has been introduced to classify the severity of breaches and the conduct of offending parties. Depending on the tier that a breach falls into, the guidance provides an indication of the likely outcome of the case (which ranges from warning letters to criminal penalties). The guidance suggests that OFSI will take account of factors such as the “strategic priority” of the regime breached, the systems and controls in place to prevent the breach, and whether the breach is an isolated incident when determining what tier it should fall into.
• Introduction of an Early Account Scheme:  The guidance introduces a new Early Account Scheme (EAS) intended to expedite investigations. Where OFSI agrees to the use of an EAS and an offending party submits a detailed, factual account of the relevant breach, the offending party may benefit from a penalty reduction of up to 20%. This may be combined with other discounts available to the offending party under the revised guidance.
• Introduction of a Settlement Scheme:  A new Settlement Scheme has been introduced. An offending party who enters into an agreement with OFSI to settle a case within specific timescales may benefit from a discount of 20% and from the opportunity to input into the summary of the case that will be published by OFSI. In order to benefit from the Settlement Scheme an offending party must waive its right to contest the findings of OFSI.
• Changes to the Voluntary Disclosure and Co-operation Discount:  Under the guidance an offending party may benefit from a discount of up to 30% for voluntary disclosure and co-operation. A discount of up to 50% was previously available. However, this discount can now be combined with the new EAS and Settlement Scheme discounts, increasing the maximum discount available to 70%.
• Fixed Monetary Penalties: The updated guidance sets out a process for imposing fixed monetary penalties for certain sanctions offences. The process, which is intended to increase the proportionality and efficiency of enforcement, would see penalties of either £5,000 or £10,000 applied to certain information, reporting, and licensing offences.

What this means for Companies

The guidance reflects a clear desire on the part of OFSI to settle enforcement cases quickly and efficiently. Co-operation between OFSI and offending parties is central to OFSI's plan for achieving this. Where a company assists OFSI with its investigation and co-operates to settle any case against it, significant discounts of up to 70% may be achieved.

However, these discounts require companies to take action quickly. The timescales to be complied with are tight and can be easily missed. As such, it is crucial that companies ensure they have robust procedures in place to identify potential sanctions breaches.

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