Sanctions 2025: UK Tightens as US Eases – What It Means for UHNW Advisers

Date: 19 Oct 2025

Karen Jones

Since our 2024 report on sanctions and Red Notices, the UK has taken a firmer line – and unwinding a designation has become harder to lift designations. With the Supreme Court’s decision in Shvidler v Secretary of State upholding an asset freeze and the detention of the yacht Phi largely on the basis of association with Roman Abramovich and signalling broad judicial deference to ministers despite Lord Leggatt’s warning that reliance on association alone risks diluting human rights protections for high net worth clients and their trustees. Rebecca Niblock of Kingsley Napley notes that sanctions are now biting deeply into private and family life, that criminal routes such as R v Ovsiannikov are emerging alongside civil penalties, and that expanded reporting duties from May 2025 place more businesses under mandatory obligations, while growing use of INTERPOL tools, new Silver and Purple Notices and persistent delays at the CCF create additional uncertainty for internationally mobile clients. Richard Stopford of Mishcon de Reya highlights three pressure points in the UK regime, namely a very high bar for challenging designations after Shvidler and Dalston Projects, a substance over form approach to ownership and control in the EuroChem case that brings discretionary trust beneficiaries within scope, and a still modest but self reporting dependent enforcement record at OFSI. Alongside this, cyber risk is now intertwined with sanctions compliance as the UK targets actors behind serious cyber attacks and warns that ransom payments to sanctioned groups may themselves be unlawful, while in the United States the Trump administration continues to use sanctions as a foreign policy lever against Iran, cartels and certain Chinese entities but enforcement against financial institutions has slowed, leaving global private banks and wealth advisers navigating a landscape in which the UK and Europe are becoming more interventionist while the US takes a more flexible, politically driven approach.

Since our 2024 report on sanctions and Red Notices, the UK has taken a firmer line – and unwinding a designation has become harder. A designation is the formal act of placing someone or an entity on the UK sanctions list, which triggers asset freezes, travel bans or other restrictions under the Sanctions and Anti-Money Laundering Act 2018.

In Shvidler v Secretary of State, the Supreme Court upheld an asset freeze and the continued detention of the yacht Phi based on association with Roman Abramovich, who was sanctioned in 2022 (the government cited his ties to President Putin, links to Evraz, and ownership of Chelsea FC as a revenue-generating UK asset). A dissent from Lord Leggatt questioned the evidential link, but the majority signals that courts will give wide latitude to ministers. Enforcement remains measured: the first prosecution under the Russia Regulations was modest in size but shows that criminal routes exist alongside civil outcomes.

“National security” becomes a magic passphrase

As a Supreme Court Justice, his dissent reflects a legal viewpoint from one of the UK’s top judges. Because he has a background in commercial law and appellate rulings, people pay attention when he calls for tighter standards. In Shvidler, his warning was that the majority’s acceptance of “association alone” (without strong linkage to the foreign policy or security aim) risks making government decisions very hard to challenge. That matters, especially for high-net-worth individuals, trustees. His warning matters because if “association alone” is enough, ultra-wealthy clients — and the trustees managing their assets — could see yachts, aircraft or investments frozen with little chance to challenge it. That shift has set the tone for a tougher UK approach this year.

UK Sanctions Now Harder to Lift

It is against this backdrop that Rebecca Niblock, Partner at law firm Kingsley Napley, who isa specialist in extradition and white-collar crime, advising UHNW, business leaders, and family offices, sets out the practical implications for private wealth clients and those who manage their assets. Niblock says these rulings are reshaping risk for private wealth clients.

She says the Shvidler v Secretary of State ruling shows how difficult it has become to lift UK sanctions once they are in place. The court allowed the asset freeze on Eugene Shvidler and the detention of his yacht Phi to continue, even though the impact on his family and private life was described as severe. The court accepted that the sanctions cut so deep they restricted ordinary household decision-making — the kind of private life rights protected under the European Convention on Human Rights — but ruled this was justified in the public interest.

The decision has drawn criticism for giving too much power to ministers and too little protection to individuals. In a strong dissent, Lord Leggatt warned there was no clear rational link between sanctioning Shvidler personally and the government’s stated foreign policy aims, cautioning that this approach weakens human rights protections.

Niblock also points to R v Ovsiannikov, the first criminal prosecution under the Russia (Sanctions) (EU Exit) Regulations 2019, which led to convictions for sanctions evasion and money laundering. The sums involved were small, but the sentencing remarks stressed deterrence as a central purpose of the regime. Niblock says this shows lawyers should now expect further enforcement, not just through civil penalties but through criminal prosecutions where the facts justify it.

Alongside the shift in how designations are treated, Niblock points out that the net of who must monitor and report potential breaches has widened. Since May 2025, the definition of “relevant firms” obliged to report suspected sanctions breaches has been expanded. More companies — including some outside the core financial sector — now fall under mandatory reporting duties. For advisers, she says, this means encouraging clients to revisit their internal reporting lines and make sure staff can recognise and escalate possible sanctions issues early.

Wider Reporting Duties and International Reach

Niblock also warns that sanctions risk increasingly overlaps with international policing. She points to rising cases of transnational repression, where some states are using INTERPOL tools to pursue political opponents and businesspeople abroad. This puts lawyers on the front line of challenging misuse of Red Notices and ensuring that extradition safeguards — such as dual criminality, proportionality and human rights bars — are applied rigorously.

New Silver Notices, designed to alert member states to emerging fraud schemes and cyber-enabled crime typologies, have also begun to appear. Their use remains limited but is growing, particularly in financial crime contexts. Alongside Purple Notices, which track organised crime methods, they show INTERPOL’s role shifting from reactive enforcement to proactive intelligence gathering, creating potential reputational and investigative risks for businesses.

Yet delays at INTERPOL’s Commission for the Control of INTERPOL’s Files (CCF) continue to grow despite extra funding. Under its statutes, access requests should be resolved within four months and deletion or correction complaints within nine, but many now exceed these timelines by months. That, she says, creates acute uncertainty for internationally mobile clients who could be at risk of arrest while travelling.

If Niblock highlights where sanctions are widening, Richard Stopford of Mishcon de Reya explains where they are biting.

Three Pressure Points in the UK Regime

Richard Stopford, Legal Director and sanctions expert at Mishcon de Reya, points to three pressure points now shaping the sanctions landscape.

He says the Supreme Court’s decisions in Shvidler and Dalston Projects Ltd v Secretary of State for International Trade have set a very high bar for challenging sanctions designations. Dalston Projects involved a UK property developer whose designation was upheld despite arguments that the government had not shown a clear link between the company and Russia’s regime.

Difficulties Challenging Designations

“Ministers are granted extensive discretion in how they utilise their statutory authority in these situations,” he says. “The Supreme Court has made clear that, in most cases, the overarching public policy aims of the UK sanctions system are likely to prevail over personal property interests.”

He adds that “the important dissenting view expressed by Lord Leggatt maintained that the UK Government had not established a ‘rational connection’ between Mr Shvidler’s asset freeze and the sanctions regime’s purposes, which leaves the door ajar for litigants to challenge designations in the future.”

“Although the pathway to challenge a designation is narrow, it is not impossible,” he says. “On the right facts, it may yet still be possible, especially in relation to newer designations.”

Ownership and Control Under Scrutiny

Stopford says a recent judgment has exposed ongoing difficulties in interpreting “ownership and control”, which continue to cause problems for financial institutions and others. The case arose after Société Générale and ING Bank refused to process payments linked to EuroChem, a Russian fertiliser conglomerate, because of concerns it might be controlled by designated individuals.

“The landmark EuroChem v Société Générale and ING Bank judgment delivered in July 2025 saw Mr Justice Bright reject EuroChem’s claims, taking a substance-over-form approach — looking at who really controls or benefits from an asset, rather than just who legally owns it — and finding that even indirect influence or benefit could amount to control for sanctions purposes,” he explains.

“The court’s substance-over-form method represents a position that will continue to shape sanctions compliance strategies,” he says. “The court’s determination that beneficiaries of discretionary trusts may be regarded as ‘owners’ for sanctions purposes could affect offshore arrangements that were previously thought to provide separation.”

He says this makes strong compliance protocols essential, given the uncertainty around beneficial ownership structures and the broad judicial approach now being taken to control.

Limited Enforcement to Date

Stopford points out that public enforcement has remained limited, with Office of Financial Sanctions Implementation (OFSI) completing just nine enforcement cases since January 2022, five of them only this year. “It is challenging to understand how OFSI’s enforcement record will dissuade bad actors from committing breaches or engaging in sanctions circumvention more broadly,” he says. “OFSI depends significantly on self-reporting for its enforcement activities, meaning that those who do the right thing and comply with the letter and spirit of the law are shouldering the burden of ensuring the effectiveness of the regime,” Stopford adds. “There’s a case for the UK Government to establish enhanced public-private collaboration and increase funding for sanctions authorities to make the regime more dynamic and effective.”

The tension for advisers

Taken together, these comments point to a system that has become harder to challenge but not necessarily more active. While Niblock warns that sanctions are widening in scope, and Stopford highlights the risk of broad judicial interpretations on control, both suggest that enforcement still lags behind policy. Delays at bodies like INTERPOL and the low output from OFSI mean those who try to comply are carrying the burden, while bad actors may see little to fear. For private wealth advisers, that creates a difficult balance: navigating an increasingly strict regime where the rules bite hard once applied — but may be applied unevenly.

While legal challenges and enforcement gaps dominate the sanctions debate, cyber risk is becoming part of the same picture. Alongside legal risk, cyber resilience is now seen as part of sanctions compliance.

Cyber Risk Meets Sanctions

Bruce McDougall, Director and Principal Cyber and Information Security Advisor at Black Arrow Cyber Consulting, says the UK has strengthened its Cyber and Russia Sanctions Regimes this year, targeting individuals and organisations involved in serious cyber-attacks. This affects financial services firms not only in terms of sanctions compliance but also if they are attacked by a sanctioned group. Many sanctioned actors are linked to ransomware, so paying them to restore systems or prevent data leaks could itself be a criminal offence.

McDougall says the best defence is a clear and objective view of a firm’s cyber risks and how well they are managed. The UK Government’s Cyber Governance Code of Practice is an excellent starting point. Boards, he adds, should understand cyber security well enough to govern it effectively. When cyber security is treated as a business-wide risk rather than an IT issue, and managed by Risk rather than IT, it signals real maturity. Cyber risk management is now an essential leadership skill, on par with financial and operational risk management.

The US takes a different tack

While UK and European sanctions policy has tightened incrementally, the United States continues to use sanctions as a more overt tool of foreign policy with the Donald Trump administration pursuing a different strategy.

Jacques Semmelman, a partner in Katten’s Commercial Litigation practice and former Assistant US Attorney in the Eastern District of New York, says the Donald Trump administration has prioritised sanctions against Iran, particularly its energy sector, and against international drug cartels — several of which have been designated Foreign Terrorist Organizations. The administration has also targeted persons and companies in China, while tempering pressure on Russia. For the Trump administration, he says, Iran remains “Public Enemy No. 1”.

At the other extreme, on 1 July 2025 — following the overthrow of the Assad government — the administration lifted sanctions against formerly embargoed Syria.

Semmelman describes Iran as “a serial sanctions evader”, using a range of tactics to get around restrictions. These include a “shadow fleet” of tankers, ship-to-ship transfers to hide origin and destination, falsified shipping documents, tampering with AIS transponders, opaque vessel ownership and management structures, and oil brokering networks that aid and abet evasions.

In April 2025, the Office of Foreign Assets Control (OFAC) warned the global shipping and maritime sector about these tactics in an updated advisory on Iranian oil and petrochemical shipments. The move followed a White House directive earlier that year — National Security Presidential Memorandum-2 (NSPM-2) — telling the United States Department of the Treasury to run a tougher sanctions programme to cut off revenue to Iran and its proxies.

The Trump administration has also imposed sanctions on Chinese persons and entities for helping Iran’s evasions, for cybercrimes, and for the manufacture and US distribution of fentanyl and other synthetic opioids — though not on the Chinese government itself.

Semmelman says sanctions are designed primarily to cut off access to financial markets — which becomes harder when alternative systems exist. The Russian financial messaging system Sistema peredachi finansovykh soobscheniy (SPFS), created by the Central Bank of Russia in 2014 after the invasion of Crimea, allows Russian banks to bypass the Society for Worldwide Interbank Financial Telecommunications (SWIFT) network to transact through a separate channel. Sanctioned Iranian banks have joined SPFS for the same purpose.

Unlike Iran, which has no relationship with the United States, Russia and China do — which, he says, means sanctions on those countries and their nationals need to be calibrated to balance competing objectives.

Enforcement slowdown in the US

While US sanctions policy has intensified, actual enforcement appears to be moving more slowly. That contrast becomes clearer when looking at how enforcement is applied.

David Oliwenstein, a partner at Pillsbury and leader of the firm’s Securities Enforcement practice and formerly with the U.S. Securities and Exchange Commission’s Division of Enforcement, says there has been a clear shift in how financial institutions are treated.

“There appears to be a marked decrease in enforcement against financial institutions under the Donald Trump administration, to date,” he says. “While there are probably several reasons for this trend, one potential explanation is that many enforcement authorities are figuring out how to best deploy resources to address evolving administration priorities.

“Both United States Department of Justice (DOJ) and U.S. Securities and Exchange Commission (SEC), for example, have indicated publicly an intent to focus on intentional misconduct, and in the case of regulatory violations, generally only pursue matters when the violation is wilful.”

“On top of those items, we understand that line-level staff may have less discretion, and more investigative and charging decisions are being centralized. All those factors could contribute to a decrease, or a slowdown, in enforcement against financial institutions.”

Sanctions at a Crossroads: Firm UK, Flexible US

These perspectives show how differently sanctions regimes are evolving on each side of the Atlantic. In the UK, political priorities are now leading courts are deferring to ministers, even where sanctions bite into rights normally protected under the European Convention on Human Rights. In Europe, banks have become de facto enforcers, declining payments they suspect involve sanctioned influence — and, as in EuroChem v Société Générale and ING Bank, being upheld when challenged.

The United States, by contrast, seems to be easing off. Practitioners point to a slowdown in enforcement against financial institutions and a softer line on crypto, reinforcing its long-standing tendency to treat sanctions as a foreign policy lever rather than a regulatory net. The shift may reflect political philosophy or personal history, but it signals a lighter touch.

For global private banks and wealth advisers, these differences are not new — but they are becoming harder to ignore. The UK is pushing further into policy-driven enforcement, while the US appears to be stepping back from it, at least for now.

A look back — Dr Anna Bradshaw, Peters & Peters

Last year’s commentators saw some of this coming. One of them was Dr Anna Bradshaw…

In our 2024 feature, Anna Bradshaw, partner in the Business Crime department at Peters & Peters, warned that advisory restrictions and bank de-risking could pull a wide range of professionals into the sanctions net. She noted that even services such as PR or architecture might be caught, and that the 2023 amendments to Regulation 54D would create uncertainty for advisers.

Her concerns now look well-founded: the widening of “relevant firms” in May 2025 has brought more professional services into mandatory reporting duties, and banks have grown more cautious about taking on clients with any perceived Russia links — echoing exactly the risk she foresaw.

Sanctions FAQs

To close, here are answers to some of the questions clients and advisers most often raise when navigating the UK’s fast-changing sanctions regime.

Q: What is a designation under UK sanctions law?

A: Being formally placed on the UK sanctions list, triggering asset freezes, travel bans and other restrictions.

Q: What does “association alone” mean in sanctions cases?

A: That simply being linked to a sanctioned person can be enough to justify sanctions, even without proof of wrongdoing.

Q: What is “substance over form” in ownership rulings?

A: It means courts look at who really benefits from or controls an asset, not just who legally owns it.

Q: How active is OFSI enforcement?

A: Limited so far — only nine cases since 2022 — but slowly increasing and likely to grow further.

Key Takeaways

The UK has tightened sanctions, making it harder to lift designations, as seen in the Shvidler ruling.
UK courts are now more inclined to support ministers’ sanctions decisions, raising challenges for individuals and private wealth clients.
New reporting duties widen the scope for firms to monitor and report sanctions breaches, increasing compliance burdens.
Transnational repression and the misuse of INTERPOL Red Notices demand vigilance from lawyers in safeguarding clients’ rights.
In contrast, the US shows a slowdown in sanctions enforcement, focusing more on foreign policy instead of strict regulatory measures.

Katten’s Citywealth Leaders List profile

Kingsley Napley’s Citywealth Leaders List profile

Mishcon de Reya’s Citywealth Leaders List profile

Subcribe here

Citywealth Forum 2026

Citywealth Leaders List