A Shift in OFSI Sanctions Compliance is happening in 2025

UK MLROs & Sanctions Heads — heading into a Board/ExCo update this week?
Here's 6 themes from OFSI's recent review that could help your message.

1. OFSI Is Shifting Gears — Fast. It's not tinkering, it's transforming.
2. 4x Enforcement Surge = Increasing Expectations
3. £3.1M Into Data Deep-dive = Sanctions Compliance Goes Automated
4. Licensing Is Going Lean — And Soon, Machine
5. Maritime Sanctions Are a Test Case — Your Sector Might Be Next
6. Disclosures Are the New Deterrent

• OFSI has focussed on becoming a data-driven, intelligence-led agency which is increasing enforcements (in contrast to the shift in the US)

• Sanctions compliance is now a core part of UK economic and geopolitical security

• UK Treasury has higher strategic and operational standard expectations for Sanctions & Money Laundering programs

1. A Shift in OFSI Compliance Philosophy is happening

Old Model: Transactional, document-driven, guided by static regulations.

New Model: Proactive, intelligence-based, aligned with national security. OFSI is increasingly leveraging national security infrastructure (e.g., MoD, JMSC) Sanctions compliance is now part of the UK’s economic deterrence strategy

Expectation: Heightened interest, more demanded of Sanctions programmes in the UK

2. 4x Resources for Enforcement…

OFSI staffing quadrupled in enforcement/licensing; advanced tools deployed.

Expectation: Firms evolve from basic compliance to mature intelligence-led functions

3. …with new tools + OFSI Data Roadmap

This expansion in staff has come with investment in new tools and processes:

• Advanced data analytics (reportedly £420k annual contract)

• Cryptocurrency investigation capabilities

• Access to specialist platforms for corporate record and data sets

The £50m Economic Deterrence Initiative (EDI) led to a £3.1m data investment (see UK Treasury doc here & snippet below):

• Data capabilities deep-dive across architecture, processing, protection

• OFSI now claim to have a data roadmap to deliver this - moving them to a proactive, intelligence-led enforcement model

4. Delegated licensing could signal future automation

• Non-senior civil servants can now approve license decisions

• To be debated, but the release of Licensing Principles potentially provides a framework triage-based licensing algorithms Automated detection across the financial sector

  Implication: Faster regulatory feedback loops = Less room for lagging compliance

  

  OFSI Designated Individuals Licensing Principles

5. Maritime Evasion Typologies as a Template for other sectors

OFSI is testing cross-sector pattern recognition first in the Maritime sector.

To be debated, but the release of Licensing Principles potentially provides a framework triage-based licensing algorithms Automated detection across the financial sector.

Data Modelling - Behavioural signatures for circumvention

Collaboration - Collaboration pipelines with non-financial regulators (DfT, MoD) via JMSC

Indirect risk - Systems to trace complex value chains through partial visibility

Implication for Sanctions Programs: OFSI will apply the same modelling to other sectors next — especially where complex supply chains + financial services intersect (e.g. trade finance, commodities).

If you're touching physical movement of value (even indirectly), this modelling is coming for your customers too.

6. Disclosure Powers – A New Public Accountability Tool

Somewhat know about OFSI’s new Disclosure Powers? Here’s an explainer/FAQ:

• What are they?

  Disclosures are an important part of OFSI’s expanded enforcement arsenal and ensure it can take proportionate action, and promote compliance lessons, across the full spectrum of severity.

• When can they be used from?

  Disclosures are available to OFSI in cases where a breach occurred from 15 June 2022 (via the Economic Crime (Transparency and Enforcement Act 2022)

• Why would they be used?

  Disclosures are intended for moderately severe cases and where OFSI considers a warning letter would be too lenient, but a monetary penalty would be disproportionately punitive.

• When were they used first?

  On 31st August 2023, OFSI made first use of this power by publishing a report naming Wise Payments Limited (“Wise”) for breaching regulation 12 of The Russia (Sanctions) EU Exit Regulations 2019 (“the Russia Regulations”).

6. Strategic Recommendations for MLROs & Heads of Sanctions

1. Shift from reactive to anticipatory sanctions compliance

2. Integrate geopolitical risk into risk assessments

3. Review and align with OFSI typologies and JMLIT intelligence

4. Prepare for greater automation and scrutiny across crypto, payments, maritime

5. Embed public accountability and reputational risk into compliance policy

7. Closing Message to your ExCo/Board

• Sanctions compliance is now strategic, not just regulatory

• OFSI’s shift demands corresponding elevation of compliance capabilities

• Investment in people, data, and detection will define resilience in 2025 and beyond