Sanctions have existed for millennia, but these economic weapons were thrust into the spotlight in 2022, when Russia invaded Ukraine and the West responded with a flurry of political action. To ensure that entities abide by economic sanctions, government bodies impose strict penalties for sanctions violations.
The extent of sanctions penalties depends on the severity of the violation, along with various other factors, as discussed in this guide.
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What is a breach of financial sanctions?
A breach of sanctions occurs when an entity (such as a state, organisation, or individual) violates the restrictions imposed by bodies such as the Office of Foreign Assets Control (OFAC).
These sanctions can include asset freezes and financial market/transaction restrictions. Anyone found to be in breach of such actions, as well as those who attempt to circumvent them, may be subject to breach of sanctions penalties.
For instance, in 2024, Swiss-based EFG International AG received an OFAC penalty of $3.74 million for processing hundreds of transactions in violation of regulations such as the Cuban Asset Control Regulation and Executive Order 14024.
Criminal and civil penalties for sanctions violations
Typically, sanctions penalties are small and rarely result in prison time, but as regulations increase and critics complain about inaction, we are seeing some changes. Furthermore, the rules set by major bodies allow for very serious penalties.
Penalties in the United Kingdom
In the UK, the Office of Financial Sanctions Implementation (OFSI) is responsible for imposing financial sanctions penalties.
Many OFSI penalties are small, such as the £5,000 fine levied against Svarog Shipping & Trading Company for failing to respond to an OFSI request. They can be substantial, though. In 2025, for instance, the OFSI fined HSF Moscow for making payments to entities subject to financial restrictions.
As per the Policing and Crime Act 2017, breaches are punishable by up to 7 years in prison, as well as fines capped at the greater of £1 million or half the value of the violation. Due to a strict liability provision, ignorance does not exempt an entity from penalties for sanctions violations. In other words, being unaware of certain sanctions rulings is not a valid defence.
In addition to the OFSI, the Financial Conduct Authority (FCA) and HM Revenue and Customs (HMRC) can also impose fines for breaches relating to money laundering and shipping, respectively. In May 2025, one of the largest UK sanctions fines (£1.16m) was levied against an unidentified exporter by the HMRC.
The UK government also announced the creation of a new body, the Office of Trade Sanctions Implementation (OTSI), in December 2023, granting it the power to deal with breaches of trade sanctions. It was officially established on 10 October 2024.
Penalties in the United States (OFAC)
The Office of Foreign Assets Control (OFAC) investigates sanctions and issues sanctions penalties in the USA. As in the UK, the extent of the OFAC penalty depends on the nature of the case, but violators can be fined millions of dollars and face up to 20 years in prison.
Examples of sanctions breaches include the aforementioned $3.74 million OFAC fine levied against EFG International AG, as well as fines in excess of $1 million for both Haas Automation and Family International Realty LLC. The former was accused of indirectly supplying parts to sanctioned entities, and the latter was charged with transferring property ownership to evade sanctions.
The largest-ever OFAC fine was issued against Binance in 2023. The cryptocurrency exchange was fined $968 million by the OFAC and a further $3.4 billion by the Financial Crimes Enforcement Network (FinCEN) for sanctions breaches and money laundering violations.
Penalties in the EU and other jurisdictions
Sanctions penalties in the EU vary based on the member state. Offenders are fined depending on their personal/company turnover, as well as the value of the breach. For entities caught in serious breach of sanctions, penalties can also include a maximum jail time of between 2 and 12 years.
Penalties for sanctions violations are equally severe outside of the UK, the US, and the EU. In Australia, individuals can be imprisoned for up to 10 years, while corporate entities may be fined up to 3x the value of the transaction.
In Canada, the United Nations Act recommends penalties of up to 10 years in jail, with a summary conviction of 1 year and a $100,000 fine. Additional penalties exist under regulations like the Special Economic Measures Act, Criminal Code, Justice for Victims of Corrupt Foreign Officials Act, and Export and Import Permits Act, all of which deal with different aspects of the country’s trade and financial sectors.
Examples of sanctions breaches
We have already provided some examples of sanctions penalties over the last few years, but there are other notable cases against individuals and companies.
UK case studies (OFSI)
The OFSI has been criticised in the past for its lack of action against sanctions violations, but it has met this criticism with increased action. In addition to fines against Svarog and HSF Moscow in 2025, both for violating Russian sanctions, it also acted against a number of UK-registered charities for failing to respond to information requests.
Other examples of sanctions breaches in the UK include a £15,000 fine against Integral Concierge Services Limited in 2024 for handling the funds of a designated individual, and a £20.47 million fine against Standard Chartered for giving a designated person access to funds without a license.
These sanctions penalties highlight the importance of checking sanctions lists and being aware of politically exposed persons (PEPs) and other designated individuals, especially as penalties for sanctions violations seem to be increasing in severity and frequency.
US & international cases
In 2023, Charles McGonigal, once a high-ranking member of the FBI, was sentenced to 50 months in prison for conspiring to provide services to a sanctioned Russian billionaire. In 2024, he was ordered to serve additional time for accepting money from someone with ties to the Albanian government.
In 2025, GVA Capital Ltd, a venture capital firm, was accused of “wilfully” violating US sanctions by investing on behalf of Suleiman Kerimov, a Russian with ties to President Putin. Kerimov was sanctioned back in 2018, before the 2022 Russian invasion of Ukraine, with the OFAC accusing him of smuggling money into France in suitcases.
The OFAC fined GVA Capital close to $216 million, alleging that the company’s co-founders met with Kerimov on two occasions in 2016, and despite seeking legal advice following Kerimov’s sanctioning in 2018, they ignored the warnings and engaged in a prohibited transaction.
In 2024, the EU marked its 300th sanctions enforcement since 2017, the bulk of which concerned Belarusian and Russian entities, with Poland, the Netherlands, and Switzerland concluding 53% of the total cases.
Lessons from real sanctions fines
The sheer severity of sanctions penalties, in combination with growing global sanctions lists, is a cause for concern for entrepreneurs and organisations that conduct business internationally. Furthermore, the strict liability laws that exist in the UK also apply in most other jurisdictions, so ignorance is rarely—if ever—a viable excuse.
If your business activities leave you at risk of sanctions penalties, consider the following compliance checklist:
- Conduct sanctions screening: Check individuals and companies against official sanctions lists to ensure there are no restrictions against them. Not only do these checks comply with regulations and help you to avoid sanctions penalties, but they will also protect your interests by preventing any dealings with entities linked to money laundering, terrorism, and other criminal activities.
- Monitor jurisdiction-specific rules: Sanctions lists and rules can differ from country to country. You should direct your efforts to relevant regions and ensure you thoroughly check all applicable sanctions lists.
- Disclose breaches: Voluntary self-disclosure (VSD) typically reduces civil penalties for sanctions violations. Regulators may be less willing to seek the toughest penalties if the company in question admits their mistake and provides the governing body with all relevant information.
How to avoid sanctions breaches in your business
Organisations in this increasingly complex world must juggle various regulations relating to everything from anti-money laundering to data privacy. Sanctions toss another ball into that chaos, and mean companies are exposed to severe penalties following a single misstep.
At A Data Pro, we know how to navigate this environment. We can help you to protect your interests and safeguard your business while staying compliant now and in the future.
We provide various services to help you do this, including real-time sanctions list checking that uses a 24/7 monitoring system to account for every update; adverse media screening to support your KYC and AML efforts; and due diligence reports to scrutinise every potential client, customer, partner, and investor.
Contact one of our experts today to discover what A Data Pro can do for your business.
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FAQs
What is a financial sanctions breach?
A financial sanctions breach occurs when an individual or a legal entity flouts rules relating to the finances of a sanctioned individual or entity, such as using frozen assets, providing financial support, or investing/purchasing on behalf of the sanctioned individual or entity.
Who enforces sanctions in the UK and US?
The Office of Financial Sanctions Implementation (OFSI) deals with financial sanctions enforcement in the UK, while the Office of Trade Sanctions Implementation (OTSI) handles trade sanctions enforcement. The Office of Foreign Assets Control (OFAC) manages sanctions enforcement in the US.
What happens if I unknowingly breach sanctions?
Sanctions penalties apply whether the individual acted knowingly or unknowingly. Intent is usually taken into consideration, so someone who acts with malice may receive a sterner penalty than someone who made a mistake, but penalties can be imposed in all cases.
Can I reduce a penalty with voluntary disclosure?
In most cases, yes. It is considered to be a significant mitigating factor in enforcement. Sanction penalties may still apply, but they are likely to be much less severe if regulatory action began following a voluntary disclosure.
