Sanctions Tracker: New Call For Evidence On UK Ownership And Control Test

In this post we summarise a new call for evidence on the UK ownership and control test, along with other recent developments regarding designations and guidance.

Call for evidence in relation to ownership and control

The Office of Financial Sanctions Implementation ("OFSI") has published a call for evidence in relation to the ownership and control test in UK financial sanctions. As readers will be aware, UK asset freeze sanctions apply to designated persons ("DPs") and to entities owned/controlled by such a person, with the relevant test set out in each set of sanctions regulations and capturing the following situations: (i) the DP owns more than 50% of the shares or voting rights in the entity; (ii) the DP has the right to appoint or remove a majority of the board of directors; or (iii) it is reasonable, having regard to all the circumstances, to expect that the 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 the entity's affairs are conducted in accordance with their wishes. It is this third (potentially subjective and hypothetical assessment) that can be particularly problematic to apply in practice.

As part of the 2025 cross-government review of financial sanctions, the UK government committed to delivering measures to provide further clarity on ownership and control, with this call for evidencing forming part of that commitment.

The call for evidence covers areas including the "hypothetical control" element of limb (iii) above and the way in which this arises in practice, implementation challenges associated with the control test, and views on the categories of control identified by the courts in the Hellard case (which we discussed in our previous post).

Although focused on "control" the call for evidence documentation indicates that the UK government is separately considering issues relating to ownership, in particular regarding the aggregation of holdings by multiple DPs and a potential amendment of the "more than 50%" threshold outlined above to "50% or more", to more closely align with the equivalent EU and US tests.

The call for evidence is open until 13 April 2026 and the government is particularly keen to receive responses from "relevant firms", i.e. those subject to an obligation to report suspected DPs and suspected breaches to OFSI. OFSI has also published a blog in relation to the call for evidence.

New designations

To mark the fourth anniversary of the invasion of Ukraine, the UK has announced a new package of Russia sanctions designations targeting the Russian energy industry, oil exports and suppliers of military equipment.

OFSI also published two general licences in relation to these new designations, regarding the wind-down of transactions with new DPs. These relate to Maritime Mutual and PJSC Transneft.

OFSI licensing process

OFSI has provided further guidance on its internal processes relating to licensing in a new blog which will be of interest to companies needing to seek licences relating to financial sanctions.

The post explains that each licence application received by OFSI is assessed against seven criteria, as set out below.

• Nature of the licensing purpose: licences relating to basic needs, humanitarian grounds or anything where delay could significantly affect access to justice (i.e. where there are court dates that must be complied with) are generally treated as high priority.
• Materiality: OFSI assesses the significance of the application in real terms, including by reference to the applicant's circumstances, the size of the transaction, and whether delay would result in economic loss.
• Timing: 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.
• UK economic impact: applications that may affect UK jobs, business continuity or wider economic welfare may be prioritised.
• 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).
• 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.
• Complexity: complex cases, or those which set a precedent, may require more time and scrutiny and may be prioritised to ensure consistent and robust decision-making. However the blog notes that, even when prioritised, complex cases may take time to address.

OFSI's guidance to applicants to enable efficient processing of their applications is to:

• provide a clear legal basis for the application (i.e. identifying the relevant licensing ground and how it applies to the particular circumstances);
• avoid repeat or speculative applications;
• highlight genuine deadlines; and
• use OFSI's online licence application form.

OFSI compliance lessons

Following its imposition of a monetary penalty on a bank (as mentioned in our previous post), OFSI has published a blog outlining compliance lessons arising from this penalty.

OFSI's key "lessons learned" relate to: (i) the importance of screening data and system configuration; (ii) the inherent risks associated with automated sanctions screening and the need for contingency procedures; (iii) the importance of keeping training content accurate and up to date; and (iv) the benefits of prompt voluntary disclosure of breaches.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.