Executive Summary
- What is new: UK Russian sanctions were strengthened with new designations and a reduced oil price cap. The government also published its cryptoassets threat assessment, issued guidance on sanctions for non-UK businesses and announced a consultation on enforcement.
- Why it matters: Together, the announcements, including warnings about sanctions evasion involving cryptoassets and risks to non-UK businesses that are involved in such activity, signal areas of likely enforcement activity.
- What to do next: Businesses will want to review and — where required — update their compliance programs to address the new guidance.
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The UK government has announced new sanctions relating to Russia, including new designations and changes to the oil price cap, in coordination with EU allies. The government has also issued its first risk threat assessment for the cryptoasset sector and further sanctions guidance designed to tackle circumvention of Russia-related sanctions. It also signalled potential changes to enforcement powers available to UK sanctions authorities.
This article considers the key UK sanctions developments in recent weeks and highlights the on-going need for businesses to maintain their sanctions compliance efforts.1 (For an analysis of the EU’s recent tranche of sanctions against Russia and Belarus, see our July 31, 2025, client alert “EU Targets Russia’s Energy, Financial and Defense Sectors in 18th Sanctions Package”.)
Oil Price Cap
On 18 July 2025, the UK government announced a new Russia sanctions package, which included new designations (see below) and, in coordination with the EU, a reduction in the crude oil price cap from $60 barrel to $47.60. The new oil price cap will come into effect on the 2 September 2025 and will apply to all services2 captured by the price cap. The Office of Financial Sanctions Implementation (OFSI) has published an updated oil price cap general license.
The change in the crude oil price cap is designed to directly hit Russia’s oil revenues, which the UK government reports have already fallen 35% year-on-year to May. This also builds on the extensive sanctions already imposed on Russia’s energy sector and shadow tanker fleet. On 6 July 2025, for instance, the UK government published a red alert regarding Russia’s shadow fleet and the tactics used to evade UK sanctions. This alert was issued jointly by the OFSI and other UK enforcement authorities, including the National Crime Agency, and provides information to assist financial institutions in seeking to identify potential evasion of UK sanctions related to Russian oil and gas.
UK Imposes New Sanctions on GRU Military Intelligence Officers and Others
On 18 July 2025, the UK announced that it had identified 18 Russian military intelligence (GRU) officers and three GRU units responsible for cyberattacks in the UK, Ukraine and Europe (including the hacking of one of the victims in the 2018 Salisbury poisonings). The government reported that Russian military intelligence units had targeted media outlets, telecoms providers, political and democratic institutions, and energy infrastructure in Britain. Foreign Secretary David Lammy explained that this new wave of asset freeze sanctions aims to crack down on President Putin’s “hybrid threats”. These individuals and entities will be subject to an asset freeze under Cyber (Sanctions) (EU Exit) Regulations 2020.
The UK also announced further designations on 35 ships and two further entities on 21 July 2025, further increasing the pressure on Russia’s shadow fleet and energy sector.
OFSI Publishes Threat Assessment for the Cryptoasset Sector
On 21 July 2025, OFSI published its first Cryptoassets Threat Assessment report, highlighting the growing risks and compliance challenges faced by UK cryptoasset firms in relation to financial sanctions. In particular, the report notes that, since January 2022, over 7% of suspected sanctions breach reports involved cryptoasset firms, with most cases linked to Russia (90%) and the remaining to Iran (10%).3
The report found that it is likely that UK cryptoasset firms have under-reported suspected breaches of financial sanctions to OFSI since August 2022.4 Key threats identified by the report include inadvertent and delayed reporting of breaches, direct and indirect exposure to sanctioned entities, such as the Russian exchange Garantex, and sophisticated evasion tactics by North Korean and Iranian actors.5
The assessment underscores the importance of robust due diligence to detect and prevent sanctions circumvention and money laundering, and the use of blockchain analytics for the retrospective discovery of suspected breaches and/or to identify exposure to virtual addresses of persons who were subsequently sanctioned, and the timely reporting to OFSI of suspected breaches and other matters.6
Businesses should ensure they include potential cryptoasset-related sanctions breaches in their risk assessments, especially as OFSI and other government agencies increasingly focus on addressing the threats to sanctions compliance posed by illicit activity involving cryptoassets.
OFSI Announces Consultation on Enforcement Policies and Processes
On 22 July 2025, OFSI launched a consultation related to potential changes to OFSI’s case assessment guidance and penalty discounts for voluntary disclosure and co-operation, the introduction of a settlement scheme for monetary penalty cases, and the introduction of a streamlined enforcement process (amongst other proposed changes). The consultation will run until the 13 October 2025. For a discussion of the UK’s cross-government review earlier this year of its sanctions programs, see our 2 June 2025 alert “EU and UK Sanctions: New Sanctions Packages and Other Key Developments.”
On 17 July 2025, also in an effort to streamline its processes, OFSI introduced new online forms for submitting license applications, reporting suspected breaches and other key reports, such as frozen asset reporting. The new online forms will operate alongside OFSI’s existing processes during a transition period.
New Sanctions Guidance for Non-UK Businesses
On 27 June 2025, the UK government published a package of new guidance on navigating UK sanctions for non-UK businesses operating outside of the UK. The guidance outlines the scope and obligations associated with UK sanctions, highlighting the potential risks of non-compliance for non-UK businesses.
While only UK persons are legally obliged to comply with UK sanctions, the guidance makes clear the significant risks for non-UK persons who facilitate the circumvention of UK sanctions and sets out practical steps companies can take to manage this risk, including in relation to due diligence conducted on customers and suppliers. The guidance also lists a range of additional sanctions-oriented screening tools available to support businesses in conducting customer due diligence checks.
The guidance highlights five countries — Kazakhstan, Uzbekistan, Kyrgyzstan, Georgia and Armenia — of particular concern in the context of Russia sanctions compliance, and underscores the UK government’s commitment to tackling the circumvention of sanctions in countries that are perceived to be facilitating Russia’s access to prohibited goods and services. However, the guidance is clear that its scope is not limited to these countries; it applies broadly to any jurisdiction where circumvention may occur. Importantly, the guidance also emphasises that non-UK firms facilitating the circumvention of UK sanctions are themselves at risk of being sanctioned, making clear that the UK does not view sanctions compliance as a solely domestic issue.7
OFSI Issues New General Licenses
On 21 July 2025, OFSI issued INT/2025/6488808 and INT/2025/6397444, which allow persons to wind down any transactions involving Litasco Middle East DMCC and Intershipping Services LLC, respectively. These two entities were designated on the 21 July 2025.
On 18 July 2025, OFSI also issued INT/2025/6641960, which allows non-designated persons who have made investments through designated brokers to transfer their funds to a non-designated broker. The general licence only applies where the only designated party involved is the designated broker.
On 9 July 2025, OFSI issued updated guidance regarding a new exception under the Sanctions (EU Exit) (Treasury Debt) Regulations 2025, which allows payments in respect of HM Treasury debt to be made to, or for the benefit of, individuals sanctioned by the UN, provided the payment obligation arose prior to the individual’s designation and the funds are paid into an account within the scope of the exception (e.g., a frozen UK account). The new exception came into force on 10 July 2025.
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1 This client alert is for informational purposes only and does not constitute legal advice. Complex assessments often have to be made as to which sanctions regime applies in any given instance, given the multinational touch points of many entities and individuals. In that regard, given the complex and dynamic nature of these sanctions regimes, there may be developments not captured in this summary. Moreover, while the summary was accurate when written, it may become inaccurate over time given developments. For all of these reasons, you should consult with a qualified attorney before making any judgments relating to sanctions, as there are potentially severe consequences of failing to adhere fully to sanctions restrictions.
2 Maritime transportation of certain oil and oil products and financial and brokering services related to the same.
3 OFSI, “Cryptoassets Threat Assessment Report” (21 July 2025), page 8.
4 Ibid., page 7.
5 Ibid., pages 20-26.
6 Ibid., pages 13-14.
7 FCDO, “UK sanctions guidance for non-UK businesses”, Section 3.3,1 (27 June 2025): “The UK has already imposed sanctions on this basis on businesses in a range of third countries that have been identified as engaged in activity which undermines the objectives of UK sanctions against Russia.”
This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.