Recommendations for UK Sanctions Evaluation Fall Short on Solidity

Recommendations for UK Sanctions Evaluation Fall Short on Solidity

The UK Government has maintained a robust approach to sanctions implementation and enforcement, as highlighted by the cross-government review published on 15 May 2025. However, public details about the proposed public-private sanctions partnership and whistleblower incentivization scheme remain scarce.

In an effort to improve sanctions breach detection and enforcement, the UK Government is considering the creation of a public-private sanctions partnership, similar to the Joint Money Laundering Intelligence Taskforce (JMLIT). The specific operational details or new initiatives of such a partnership are yet to be publicly detailed.

Regarding whistleblower incentivization, there is no explicit mention of a new or expanded incentivization or reward program tailored for whistleblowers concerning sanctions violations. The enforcement approach appears focused on strengthened regulatory guidance, compliance frameworks, and penalties, rather than visible public incentivized whistleblower programs.

The Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2025, coming into force at the end of June 2025, extends the UK whistleblowing regime to include reports of suspected sanction breaches. This move is aimed at promoting co-operation only if companies are sufficiently incentivized to engage with the early civil settlement scheme for breaches of financial sanctions.

The UK Government has already taken steps to incentivize whistleblowing, with HMRC introducing an informant incentive scheme, and the Serious Fraud Office (SFO) committing to "progress whistleblower incentivisation reform." The SFO's efforts could potentially serve as a model for the proposed sanctions whistleblower incentivization scheme.

Enforcement actions have intensified, including targeting circumvention via financial networks and crypto platforms exploited by Russia, demonstrating a strong stance on enforcement and cooperation with allies such as the US. The legal framework, largely based on the Sanctions and Anti-Money Laundering Act 2018, remains robust with criminal offences for sanctions breaches clearly defined, and OFSI playing a central role.

The Review's conclusions aim to facilitate compliance with UK sanctions, increase deterrence against breaches, and invigorate the cross-government toolkit of sanctions enforcement. The review was led by the Foreign, Commonwealth and Development Office (FCDO) in collaboration with sanctions departments and agencies.

The UK Government may wish to follow the example of the U.S. FinCEN's Anti-Money Laundering and Sanctions Whistleblower Program, which awards between 10% and 30% of the financial penalty levied as a result of the report to the whistleblower. The Royal United Services Institute (RUSI) has also published a report on the role of financial rewards for whistleblowers in the fight against economic crime.

In summary, the UK Government's approach to sanctions enforcement is focused on collaboration, due diligence, and penalties. The specific innovative mechanisms like public-private partnerships and whistleblower incentivization, recommended by the cross-government review, have not yet been highlighted in recent official public updates or enforcement actions. Further announcements could follow as part of ongoing sanctions strategy development.

| Aspect | Current Status (as of mid-2025) | Future Plans/Details | |--------------------------------|-------------------------------------------------|-----------------------------------------| | Public-private sanctions partnership | Enhanced collaboration is a recommended strategy in cross-government reviews; specific operational details or new programs recently are not publicly detailed. | Likely to be developed further as part of broader UK sanctions enforcement improvements, but no public announcements. | | Whistleblower incentivization scheme | No public announcement or implementation details found for a whistleblower reward/incentivization scheme specifically related to sanctions breaches. | No explicit plans disclosed; may remain under consideration or integrated within broader enforcement frameworks. |

1. A potential future development for the UK's law firm industry could be their involvement in a public-private sanctions partnership, as this has been recommended in the cross-government reviews for improving sanctions enforcement.
2. While the enforcement approach focused on strengthened regulatory guidance, compliance frameworks, and penalties, there's no explicit mention of a finance sector-specific whistleblower incentivization scheme specifically tailored for sanctions violations, although the SFO's efforts on whistleblower incentivization reform could serve as a model.

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