Guidance

Financial sanctions guidance for Insolvency Practitioners

Published 14 November 2024

This guidance is produced by the Office of Financial Sanctions Implementation (OFSI), part of HM Treasury, the authority responsible for the implementation of financial sanctions in the UK.   

This guidance should be considered supplementary to, and not a replacement for, OFSI’s general guidance. Further sources of information that may prove helpful are listed at the end of this guidance.  

This guidance does not represent legal advice.  

If you are unsure about your obligations in a given case, you should consider seeking independent legal advice. 

OFSI is responsible for improving the understanding, implementation and enforcement of financial sanctions in the UK. We publish a list of individuals and organisations subject to financial sanctions as well as general guidance to help you comply. This is available on OFSI’s GOV.UK webpages.

1. What are financial sanctions? 

Financial sanctions help the UK meet its foreign policy and national security aims, as well as protect the integrity of its financial system. Financial sanctions include restrictions on designated persons, such as freezing financial assets, as well as wider restrictions on investment and financial services. UK financial sanctions apply to all persons within the territory and territorial sea of the UK and to all UK persons, wherever they are in the world. 

For general information on financial sanctions, your obligations, and licensing, OFSI provides general guidance.

In addition to the general guidance and this insolvency practitioners guidance, OFSI provides a range of sectoral and geographic guidance. You should also consider guidance provided by the Department for Business and Trade and HMRC.   

The names of designated persons (DP) appear on the consolidated list. This enables immediate publication following a decision to make or amend a designation, limiting the opportunity for asset flight.

2. Reporting obligations

Certain types of business are subject to reporting obligations as “relevant firms” under financial sanctions regulations. These reporting obligations are broadly the same across each of the financial sanctions regimes; see regulation 70 of the Russia (Sanctions) (EU Exit) Regulations for an example. 

From 14 May 2025, insolvency practitioners will be subject to these sanctions reporting obligations as they will be added to the list of “relevant firms” under financial sanctions regulations.  

Extending reporting obligations to this sector will facilitate OFSI’s aim of encouraging better sanctions compliance, as well as improving OFSI’s understanding of how financial sanctions are being implemented in the impacted sector, raising impacted businesses’ awareness of their sanctions obligations, and assisting OFSI in identifying potential circumvention gaps and financial sanctions breaches.  

An “insolvency practitioner” means a firm or individual who acts as an insolvency practitioner within the meaning of section 388 of the Insolvency Act 1986 or article 3 of the Insolvency (Northern Ireland) Order 1989.  

Under the reporting obligations, a relevant firm is required to report to OFSI as soon as practicable if it knows or has reasonable cause to suspect that a person (i) is a designated person; or (ii) has committed a breach of financial sanctions regulations. Where the designated person is a customer of the relevant firm, the relevant firm must also report to OFSI the nature and amount or quantity of any funds or economic resources held by it for the customer at the time when it first had the knowledge or suspicion. 

However, a relevant firm is only required to report this information to OFSI if the information or other matter on which its knowledge or cause for suspicion is based came to it “in the course of carrying on its business.” For insolvency practitioners, “in the course of carrying on its business” means in the course of acting as an insolvency practitioner.  Where an insolvency practitioner undertakes business that does not constitute insolvency practitioner business – for example where it acts as a receiver in the sale of a property or undertakes an independent business review – this is not subject to sanctions reporting obligations.  

When reporting to OFSI under the sanctions reporting obligations, you must include:  

• the information or other matter on which the knowledge or suspicion is based  

• any information you hold about the person or designated person by which they can be identified  

• if you know or have reasonable cause to suspect that a person is a designated person and that person is a customer of your relevant firm, you must also state the nature and amount or quantity of any funds or economic resources held by you for that customer.  

Information on how to report to OFSI can be found in section 5 of OFSI’s general guidance on GOV.UK.

3. Prohibited persons

In addition to relevant firms’ existing reporting obligations in relation to frozen assets, in December 2023, the UK government introduced an additional reporting requirement for relevant firms under The Russia (Sanctions) (EU Exit) Regulations 2019 (the “Russia Regulations”).  

A relevant firm is required to inform OFSI as soon as practicable if it knows, or has reasonable cause to suspect, that it holds funds or economic resources for a person to whom financial services must not be provided to under regulation 18A(1) (a “prohibited person”).  

A prohibited person means the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, the Ministry of Finance of the Russian Federation, a person owned or controlled directly or indirectly by these entities, or a person acting on behalf of or at the direction of these entities.  

Relevant firms that hold funds or economic resources for a prohibited person must complete a reporting form template and submit it to OFSI.   

This form must be submitted when making the initial report and, thereafter, by no later than 30 November in each calendar year, providing a report to OFSI as to the nature and amount or quantity of those funds or economic resources held by that firm as of 30 September in that calendar year. Reporting obligations for this regime can be found in Part 8 of the Russia Regulations (Information and Records).

4. Further Support 

HMRC’s guidance on Anti-Money Laundering registration 

For further support with UK financial sanctions, you can: 

• Consult OFSI’s general, geographic and sectoral guidance 

• Access OFSI’s webinars 

• Subscribe to E-Alerts from OFSI 

• Email OFSI