Assessing OFSI’s 2024–25 Annual Review: Progress, Performance, and Persistent Challenges

13.11.2025

Assessing OFSI’s 2024–25 Annual Review: Progress, Performance, and Persistent Challenges

Introduction

Following the recent Office of Financial Sanctions Implementation (OFSI) Annual Review 2024–25, which sets out OFSI’s self-assessment of activity, capability development and enforcement across the UK financial sanctions regime, Michael Potts and Arozo Gajia of PCB Byrne consider its implications for solicitors. 

The OFSI’s declared objectives were to advance three interlocking aims: Effective Compliance, Effective Capability and Effective Enforcement. The Review records substantial quantitative and qualitative outputs against each aim: an expanded Consolidated List (4,733 entries as at 5 April 2025), a material increase in reported frozen assets (£37.08 billion in the 2024 Frozen Asset Review), an intensified licensing workload (904 specific licensing decisions in 2024–25), a stepped-up enforcement action (57 enforcement actions in the year and a dedicated Compliance Enforcement team), and a range of capability-building measures supported by the Economic Deterrence Initiative (EDI).

• The Consolidated List and frozen assets

1. Consolidated List size: 4,733 entries (3,750 individuals, 968 entities, 15 ships).
   
   
2. Russia remains the predominant regime on the Consolidated List, accounting for 2,113 designations (44.6% of the Consolidated List) with 191 Russia-related additions in 2024–25 (74 individuals, 117 entities), together with 36 amendments and 9 delistings.
   
   
3. Frozen assets: the 2024 Annual Frozen Asset Review reports £37,079,363,495.69 in frozen assets across regimes; the Review displays the principal regime breakdown:
   • Russia: £22,518,311,441.1
   • Libya: £12,955,261,308.53
   • Belarus: £1,177,607,044.69
   • Syria and others account for the balance.
4. OFSI also reports an in‑year Russia frozen-asset figure of £28,677,716,919.88 (Feb 2022–May 2025), explaining that in‑year reporting captures asset values at the time of freezing and is not directly comparable to the Annual Frozen Asset Review.

• Licensing activity and general licences

1. General licences: 19 issued in 2024–25 (up from 16 in 2023–24). Examples noted in the Review include licences responding to new designations, an Arbitration Costs General Licence, re‑issuance of a Correspondent Banking/Personal Remittances General Licence, and administrative general licences later revoked when the Required Payments Exception came into force.
   
   
2. Specific licensing decisions: 904 decisions taken in 2024–25 (down from 1,401 the previous year). OFSI reports 471 licences granted (new and amendment), 361 applications withdrawn, 33 authorities (licenses) not required, and 35 licences refused.
   
   
3. Licensing by regime (selected): Russia 279 specific licences (up from 252), Libya 109, Counter Terrorism 19 (up from 7), Global Anti‑Corruption 43 (up from 16). OFSI states it improved licensing guidance, web pages and introduced a licensing aftercare service (EDI-funded).

• Outreach, guidance and targeted advisories

1. Communication outputs: 159 e‑alerts, LinkedIn posts and blogs; launch of a combined e‑alert service (with FCDO and OTSI) reaching over 56,000 subscribers by April 2025; publication of a dedicated FAQs resource (145 FAQs published since May 2024); a major website accessibility upgrade.
   
   
2. Targeted advisories: published advisories include the North Korea IT Workers Advisory; an Oil Price Cap / OPC advisory addressing product origin manipulation; and sectoral Threat Assessment Reports (beginning with Financial Services Threat Assessment, February 2025).

• Capability, intelligence and international engagement

1. EDI-supported enhancements: improved data management and protection, procurement of external legal support for enforcement, licensing aftercare and monitoring, expanded training (>50 specialist training opportunities), and more proactive investigations into novel sanctions such as the OPC.
   
   
2. Intelligence and disruption: greater strategic intelligence capability, participation in the Joint Money Laundering Intelligence Taskforce (JMLIT) and co‑chairing the Financial Sanctions Circumvention Cell with the private sector; references to disruption of cryptocurrency exchanges and other facilitators.
   
   
3. International engagement: participation in over 210 engagements across 44 jurisdictions; OFSI signed its first Memorandum of Understanding with the US Treasury (OFAC).

• Enforcement statistics and practice

1. Suspected breach cases recorded in 2024–25: 394; cases closed: 214 in-year.
   
   
2. Sources: OFSI notes a shift toward non‑self‑reported case identification (151 non‑self‑reported cases in 2024–25, up from 108).
   
   
3. Enforcement actions: 57 in 2024–25 (warning letters, disclosures, monetary penalties and referrals). Monetary penalties in the period include a £15,000 penalty against Integral Concierge Services Limited and a £465,000 penalty against Herbert Smith Freehills LLP (HSF) Moscow. OFSI emphasised lessons from the HSF matter (risk awareness, adherence to procedure, ownership/control considerations).
   
   
4. Active cases: OFSI reports 240 active investigations as of April 2025.
   
   
5. Counter‑terrorism: OFSI used its autonomous domestic counter‑terrorism designation powers (CT3) to designate a suspected New IRA financier (December 2024) and Blood and Honour (January 2025), marking the first uses of CT3 in Northern Ireland and against an extreme right‑wing group respectively.
   
   
6. Disclosure action: OFSI disclosed breaches by three NGOs under counter‑terrorism regulations for failure to respond to information requests.

• Legislative amendments

1. Sanctions (EU Exit) (Miscellaneous Amendments) (No.2) Regulations 2024 (laid 14 November 2024) contained 11 measures intended to strengthen reporting, enforcement and licensing powers, and to clarify licensing grounds (examples include amendments to Judicial Decisions licensing ground, a new Insolvency Services licensing ground, and a Regulatory Payments exception consolidating four general licences).
   
   
2. The definition of “relevant firms” was expanded to include high value dealers, art market participants, insolvency practitioners and letting agencies.
   
   

Practical implications 

• Due diligence, client onboarding and continuous monitoring

1. The continued expansion of the Consolidated List — and the concentration of Russia‑related designations — reinforces the necessity for robust entity and beneficial‑owner screening, as well as periodic re‑screening. Solicitors should ensure that client onboarding and transaction screening controls are matched to the heightened pace of designations and amended list entries.
   
   
2. OFSI’s emphasis on ownership and control (noted in the HSF lessons) underscores that legal advisers must look beyond formal ownership to assess ultimate control, including downstream or indirect ownership chains and nominee structures. Practical client advice should document the basis of any control analysis and the steps taken to verify it.

• Licensing strategy and application practice

1. The increase in licences granted and the introduction of a licensing aftercare service suggest OFSI aims to support legitimate business activity while preserving sanction integrity. Advisers should:

• Familiarise themselves with the revised licensing guidance, the new licensing grounds (eg, Insolvency Services ground), and the circumstances in which the Judicial Decisions ground applies (pre‑ and post‑designation).
• Use pre‑application engagement where appropriate and ensure applications include the evidential detail OFSI has emphasised; improved guidance and FAQs may reduce withdrawal risk.
• Ensure timely fulfilment of reporting conditions attached to licences; licence reporting failures are expressly the focus of the new Compliance Enforcement team.

• Client‑facing risk allocation and contract drafting

1. Contracts should expressly allocate sanctions risk, compliance obligations and notification duties. Where client operations involve cross‑border flows, shipping, high‑value goods, or cryptoassets, contractual protections (warranties, indemnities, termination rights) should reflect OFSI’s evolving risk typologies (OPC / oil origin manipulation, North Korea IT risks, crypto facilitation).
   
   
2. Insolvency practitioners and letting agents have been brought explicitly within the scope of “relevant firms”; legal advisers acting for parties in those sectors must adapt standard clauses and advice to account for the reporting obligations and potential OFSI engagement.

• Responding to inquiries, disclosures and enforcement risk

1. The Review’s emphasis on disclosure and the availability of lesser enforcement measures (warning letters, disclosures) demonstrates that early, accurate engagement with OFSI is beneficial. Self‑reporting remains a mitigating factor when OFSI determines whether and how to enforce; solicitors should advise clients that immediate, full disclosure is a recognised route to more favourable enforcement outcomes.
   
   
2. Legal advisers should adopt established internal escalation procedures to ensure timely responses to OFSI information requests. The three NGOs’ disclosure example demonstrates that failure to respond to OFSI inquiries can itself attract an enforcement outcome.

• Sector‑specific considerations

1. Financial institutions remain the primary source of suspected breach reports (142 of 394 reports in 2024–25). Legal practices advising banks and payment service providers should ensure that internal interfaces between legal advisers, compliance teams and front office functions are functioning and that instructions reflect sanctioned‑person controls.
   
   
2. The crypto asset sector (40 reports) and the maritime sector (referenced in OPC advisories) are areas where solicitors should anticipate heightened regulatory scrutiny and should work with clients to document AML/KYC and sanctions‑screening controls, shipping documentation and certificates of origin.
   
   
3. For lawyers advising art market participants, high value dealers and property practitioners, the inclusion of these groups among “relevant firms” and the publication of Threat Assessment Reports will necessitate enhanced client‑facing compliance programmes and bespoke risk assessments.
   
   

Critical appraisal: strengths, ambiguities and areas warranting greater transparency

• Strengths 

1. Measurable outputs and transparency: OFSI provides concrete metrics (Consolidated List counts, frozen asset totals, licensing statistics and enforcement case numbers). These assist practitioners in benchmarking risk and informing client advice.
   
   
2. Communications and guidance: The publication of 145 FAQs, sectoral Threat Assessment Reports and targeted advisories (e.g., North Korea IT workers; OPC/product origin manipulation) materially assists legal advisers in translating regulatory risk into client‑level guidance.
   
   
3. Intelligence and international cooperation: The MoU with OFAC and sustained international engagement are important for coordinated enforcement and information exchange in cross‑border matters; EDI investments in data and legal support address capacity constraints.

• Ambiguities and practical limitations for practitioners

1. Interpretation of frozen asset figures: OFSI publishes two different but related frozen asset figures (Annual Frozen Asset Review vs in‑year reporting) and explains methodological differences. From a legal advisory perspective, these figures are useful but not self‑explanatory. A practitioner assessing client exposures or advising lenders would welcome more granular reconciliation principles or worked examples demonstrating how valuations are determined and reconciled across the two measures.
   
   
2. Enforcement and deterrence: The Review records 394 suspected breaches and 57 enforcement actions, with two monetary penalties published in the annual period. Practitioners will ask whether the current enforcement data and penalty scale provide a consistent deterrent signal given the magnitude of frozen assets and the complexity of circumvention typologies. OFSI’s shift to intelligence‑led non‑self‑reported case identification is encouraging; nonetheless, more transparency about expected timelines and indicative penalty ranges would improve legal risk forecasting.
   
   
3. Prioritisation criteria: OFSI states it prioritises “cases with the greatest impact” yet provides no public, structured prioritisation framework or scoring matrix. Solicitors advising clients on likely investigatory outcomes and resource expectations would benefit from published guidance setting out qualitative and quantitative prioritisation indicators (for example, factors considered in elevating a suspected breach to a full investigation or public enforcement).
   
   
4. Licensing timeliness metrics: The Review notes improved licensing responsiveness and a decline in total decisions. However, the absence of median or average processing times for key licence categories limits the ability of advisers to predict turnaround times for urgent transactional needs (arbitration costs, insolvency matters, basic needs licences). Publication of such metrics, even in aggregate, would materially assist legal practitioners and their clients.
   
   

Recommendations for solicitors

• Update internal sanctions policies and precedents

1. Incorporate OFSI’s revised licensing grounds (Judicial Decisions, Insolvency Services) and the expanded list of relevant firms into client‑advice templates, precedents and checklists.
   
   
2. Embed OFSI FAQ references and Threat Assessment Report red flags into standard client memos and transactional due diligence workflows.

• Evidence control and documentation

1. Where clients rely on complex ownership or control analyses, ensure contemporaneous documentation of searches, inquiries and the rationale for concluding a person or entity is or is not a designated person. The HSF lessons make clear OFSI’s focus on ownership and control determinations.

• Engage proactively on licence reporting and aftercare

1. Use OFSI’s licensing aftercare where available and ensure internal reporting obligations under specific licences are met scrupulously. Establish internal compliance sign‑offs and retain evidence to support timely licence reporting.

• Prepare for increased interaction with OFSI and law enforcement

1.  Train relevant lawyers and compliance officers in responding to OFSI information requests and in the mechanics of self‑reporting. Prompt, accurate disclosure remains a mitigating feature in OFSI’s enforcement calculus.

Conclusion

The OFSI Annual Review 2024–25 evidences an organisation increasingly oriented toward intelligence‑led enforcement, enhanced industry engagement and strengthened operational capability. For solicitors, the principal immediate implications relate to heightened screening vigilance, refreshed licensing practices (and new licensing grounds), expanded reporting obligations for an enlarged class of “relevant firms,” and an enforcement landscape in which early self‑reporting and robust documentary evidence materially influence outcomes.

Notwithstanding the clear advances documented, areas where additional transparency — specifically around frozen asset reconciliation, enforcement prioritisation and licensing timeliness benchmarks — would materially improve legal advisers’ ability to counsel clients with precision. 

For further information about our team and expertise please visit our Financial Sanctions & Export Controls page, or contact us to speak to a member of our team. 

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