Financial sanctions

While recent attention has focused on Russia-related sanctions, it’s important to remember that the UK’s financial sanctions regime applies to a wide range of countries, individuals, and entities, including those with connections to the UK.

All firms have a vital role to play in ensuring full compliance with these measures. Regulators, including CILEx Regulation, are working together to help firms and individuals understand their obligations. If your firm is regulated by another body, please refer to their specific guidance. 

Sanctions apply broadly 

Sanctions are not limited to Russia. They also apply to: 

• Designated persons from other jurisdictions 
• UK nationals or entities involved in prohibited activities 
• Individuals or organisations with indirect links to sanctioned parties 

A high-profile example of the reach and impact of UK sanctions is the case of Chelsea Football Club. In 2022, the UK Government sanctioned the club’s then-owner, Roman Abramovich, due to his links to Russia. This led to: 

• • A government-licensed sale of the club 
  • Proceeds of £2.5 billion being frozen in a UK bank account 
  • A commitment that none of the funds would benefit Abramovich or any other designated person 
  • Ongoing legal and regulatory oversight to ensure the funds are used for humanitarian purposes in Ukraine 

Your responsibilities 

Legal professionals must: 

• Screen clients and transactions against the UK sanctions list 
• Report any matches or suspicious activity to the Office of Financial Sanctions Implementation (OFSI) 
• Avoid any action that could directly or indirectly circumvent sanctions 
• Stay informed about sanctions updates across all jurisdictions 

Sanctions compliance is a legal obligation, and failure to comply can result in: 

• • Criminal prosecution 
  • Significant financial penalties 
  • Reputational damage 

For guidance, screening tools, and reporting procedures, visit the UK Financial Sanctions Guidance page. 

Legal professionals are not generally prohibited from providing legal advice to individuals or entities subject to UK financial sanctions, including those under asset freeze restrictions.

The UK sanctions regime is not designed to block access to legal services or justice. However, payment for legal services, including services provided on credit, does require a licence from the Office of Financial Sanctions Implementation (OFSI). 

Since 31 October 2022, payments from persons designated under the Russia or Belarus sanctions regimes have been covered by OFSI general licences.  

From 29 October 2025 to 28 April 2026, OFSI has issued General Licence INT/2025/7323088, which permits UK legal firms and counsel to receive payments from designated persons under the Russia and Belarus sanctions regimes.  

The licence includes the following payment caps: 

• Legal fees: Up to £2,000,000 per matter (including VAT) 
• Expenses: Up to 10% of fees, capped at £200,000 
• Where no fees are received: Expenses up to £50,000 per designated person, per law firm, for the duration of the licence.

All payments made under this licence must be reported to OFSI within 14 days, using the appropriate reporting forms. Records must also be kept for 6 years.  

Access new General Licence 2025 for further information.

Legal advice must be carefully considered in the context of sanctions compliance. While advising a client on how sanctions affect their business is permitted, supporting or facilitating prohibited actions, such as helping a designated person restructure finances to evade sanctions, may constitute a breach.

For example:

• Permitted: Advising a client that they cannot raise capital due to sanctions
• Prohibited: Preparing documents to help them raise capital in breach of sanctions

Legal professionals must ensure their advice supports compliance, not circumvention.

Sanctions compliance is not limited to any one area of law. Whether you’re working in:

• Commercial law
• Property transactions
• Trust and company services
• Litigation

you must assess whether your client is subject to sanctions and whether your services could risk breaching UK regulations.

For full details of the licence and reporting requirements, visit the OFSI Legal Services General Licence page.

Legal professionals are generally permitted to provide legal advice to individuals or entities subject to UK financial sanctions, including those under asset freeze restrictions. However, receiving payment for those services, whether upfront or on credit, requires a licence from the Office of Financial Sanctions Implementation (OFSI).

OFSI requires that all legal fees and disbursements be reasonable. Applicants must demonstrate this when applying for a licence or reporting under the general licence. OFSI considers the following as useful benchmarks:

• Supreme Court Cost Guides
• Typical recoverable costs in civil proceedings

Fees and expenses must relate specifically to:

• The provision of legal advice
• Litigation
• Dispute resolution

OFSI also confirms that court fees and payments into court for security for costs may be licenced under the reasonable legal fees ground.

To ensure compliance and avoid delays:

• Apply for a licence in advance of providing substantive legal services
• Provide detailed evidence of the nature and scope of work
• Justify fee levels with reference to complexity, time spent, and seniority of fee earners

Generic or vague descriptions may result in delays or refusal of a licence.

For full details, visit the OFSI Legal Services General Licence page.

In certain circumstances, it is possible to apply for a licence from the Office of Financial Sanctions Implementation (OFSI) to carry out activities that would otherwise be prohibited under the UK’s financial sanctions regime.

OFSI’s Russia guidance and the relevant amendment regulations outline the grounds on which licences may be granted. These grounds vary depending on the nature of the activity being undertaken.

Notification requirement

Please note: If your firm intends to apply for an OFSI licence or operate under the general licence, CILEx Regulation expects to be notified in advance.

This helps ensure transparency and supports firms in meeting their regulatory obligations.

Legal professionals may provide legal services to a designated person without a licence, as access to justice is protected. However, until 30 October 2022, firms could only be paid for those services if they had obtained a licence.

Since then, OFSI has introduced a general licence, currently INT/2025/7323088, which permits payment for legal services provided to designated persons under the Russia and Belarus sanctions regimes. This licence is valid until 28 April 2026.

Individuals and entities subject to an asset freeze, known as designated persons, are listed on the Office of Financial Sanctions Implementation (OFSI) consolidated list. Legal professionals must ensure they do not:

• Make funds or economic resources available to designated persons
• Receive payments from them
• Facilitate any transactions that could breach sanctions

Where to Find the Lists

• The OFSI Consolidated List includes all designated persons under UK financial sanctions.
• A separate list of Russian entities subject to financial and investment restrictions is also available.
• The Russia regime page on OFSI’s website provides a full list of designated persons under the Russia (Sanctions) (EU Exit) Regulations 2019, which came fully into force on 31 December 2020 and has since been amended multiple times.

These lists are updated regularly, and changes can happen quickly. OFSI provides email alerts to subscribers whenever updates are made. Firms are strongly encouraged to subscribe and monitor these updates to remain compliant.

For direct access to the consolidated list and regime-specific guidance, visit the OFSI website.

If your firm becomes aware of or suspects a breach of UK financial sanctions, you are legally required to report it to the Office of Financial Sanctions Implementation (OFSI). This obligation applies if:

• You know or suspect that a sanctions breach has occurred
• You identify or suspect that a person is a designated person
• You hold or control frozen assets

This duty applies when the knowledge or suspicion arises in the course of conducting your business as a relevant firm.

How to report

Reports must be submitted to OFSI at the earliest opportunity using the official reporting form available on GOV.UK.

Timely and accurate reporting helps ensure the integrity of the UK’s sanctions regime and protects your firm from potential enforcement action.

All legal professionals and firms regulated by CILEx Regulation must understand and comply with the UK’s financial sanctions regime. Breaching these requirements can have serious consequences, including criminal prosecution or civil penalties issued by the Office of Financial Sanctions Implementation (OFSI).

Key responsibilities

• Stay informed: Review OFSI’s guidance on enforcement and monetary penalties for sanctions breaches.
• Protect the sector: You have a duty to help safeguard the UK’s financial system and uphold the reputation of the legal services industry.
• Implement robust policies: Your firm must have appropriate procedures in place to ensure compliance, including:
  • Regular and accurate checks of the UK sanctions lists
  • Documented evidence of compliance activity
• Verify your systems: If your firm uses electronic verification tools for customer due diligence and sanctions screening, ensure these systems refresh sanctions data frequently to capture updates.

Regulatory expectations

CILEx Regulation’s Code of Conduct requires all regulated firms and individuals to comply with the law and applicable regulations. Where there is evidence of serious non-compliance, we may take disciplinary action.

For practical guidance, tools, and reporting procedures, please explore the resources linked on this page.

CILEx Regulation expects all regulated firms and individuals to take their financial sanctions obligations seriously and to demonstrate a proactive approach to compliance. This includes understanding the legal framework, assessing risk, and implementing appropriate internal controls.

What we expect

• Compliance with the law: Firms and individuals must comply with the sanctions regime as required by Principle 4 of the CILEX Code of Conduct, which states:
  • “You must understand and comply with the law and regulation applicable to you.”

   

• Awareness of reputational risk: Firms must understand the reputational implications of acting for a sanctioned individual or entity and assess whether such work aligns with their risk appetite and ethical standards.
• Notification requirements
  • Notify CILEx Regulation before seeking a licence to act for a designated person
  • Notify CILEx Regulation before operating under any general licence

   

• Internal policy and procedures: Firms must have a clear sanctions policy that outlines:
  • How the firm will identify and respond to sanctioned individuals or entities
  • Whether the firm would choose to act for a designated person if identified
  • How decisions are documented and reviewed

Supporting Resources

CILEx Regulation has published a Sanctions Risk Assessment to support firms in developing their policies and procedures. This was updated in November 2022 to reflect the introduction of the General Licence for legal fees.

Firms should refer to this assessment when setting their internal controls and training programmes.

Under the UK’s financial sanctions regime, it is now prohibited to provide Trust services to:

• Individuals or entities designated under UK sanctions
• Persons connected with Russia, unless the services were already being provided prior to 16 December 2022.

This prohibition was introduced through the Russia (Sanctions) (EU Exit) (Amendment) (No. 17) Regulations 2022 which came into force on 16 December 2022.

What are Trust services?

According to Regulation 18C, trust services include:

• Creating a trust or similar arrangement
• Providing a registered office, business address, correspondence address, or administrative address for a trust
• Acting as a trustee, or arranging for someone else to act as trustee

These restrictions apply regardless of where the trust is located, and to UK persons anywhere in the world.

Who is considered “connected with Russia”?

A person is considered connected with Russia if they are:

• Ordinarily resident or located in Russia
• A legal entity incorporated or constituted under Russian law
• Acting on behalf of, or owned/controlled by, someone meeting the above criteria.

OFSI has clarified that occasional travel to Russia does not automatically make someone “connected with Russia.”

Licensing and exceptions

In limited circumstances, OFSI may grant a specific licence to allow trust services. Common grounds include:

• Ensuring frozen assets remain frozen
• Trust services provided under a registered pension scheme, where the primary beneficiary is not a designated person

A General Licence (INT/2023/2589788) allows trust service providers 90 days to wind down services for newly designated persons.

Compliance reminder

Providing trust services in breach of these regulations is a criminal offence. Firms must:

• Review their client base and service offerings
• Cease prohibited activities immediately
• Apply for a licence where appropriate
• Report any breaches or frozen assets to OFSI

For full details, definitions, and licensing guidance, visit the OFSI Trust Services Sanctions Update

The UK Government has introduced restrictions on the provision of legal advisory services under the Russia (Sanctions) (EU Exit) Regulations 2019, with the initial ban taking effect on 30 June 2023 and amendments made on 6 September 2024.

These measures are designed to prevent UK legal professionals from facilitating financial or trade activity that would be prohibited under UK sanctions if carried out by a UK person or within the UK.

What is prohibited?

Under the amended regulations, UK lawyers must not directly or indirectly provide legal advisory services to non-UK persons in relation to specified activities that would breach UK sanctions if conducted by a UK person or within the UK.

This includes:

• Advising on commercial transactions
• Drafting or verifying legal documents
• Acting on behalf of a client in non-contentious matters

Definition of Legal Advisory Services

The term “legal advisory services” refers to legal advice provided in non-contentious matters, including:

• Application or interpretation of law
• Advice or representation in commercial transactions, negotiations, or dealings with third parties
• Preparation, execution, or verification of legal documents

However, legal representation services are excluded from this definition. This means lawyers can still:

• Represent clients in court proceedings
• Provide advice in arbitration or mediation
• Assist with dispute resolution

Clarifications and exceptions

The September 2024 amendments introduced important clarifications:

• The prohibition now applies only where the lawyer knows that their services are intended to enable or facilitate prohibited activity.
• Legal professionals may still advise on sanctions compliance, including UK and non-UK regimes.
• The General Licence previously issued for legal advisory services has been revoked, but record-keeping obligations remain in place.

Government position

The UK Government has confirmed that:

“The restrictions on legal services do not include legal representation for Russian nationals using UK legal expertise, ensuring that allowing everyone to access legal support remains a core aspect of the rule of law across the UK.”

What Firms should do

• Review your client base and service offerings
• Assess whether any advice could facilitate prohibited activity
• Maintain clear records of legal services provided
• Notify CILEx Regulation before seeking a licence or operating under any general licence

For full details and guidance, visit the UK Government’s sanctions page.