On 25 February 2025, the Treasury Committee of the UK Parliament published correspondence dated 17 February 2025 from Sir Jim Harra, HM Revenue and Customs (HMRC), regarding HMRC’s work on sanctions enforcement.
HMRC has confirmed its commitment to sanctions enforcement. As part of the enforcement strategy, since July 2022 HMRC has increased its personnel to strengthen its understanding of sanctions compliance risks. Furthermore, HMRC has recruited 40 additional criminal investigators to enforce trade sanctions offences.
As of January 2025, the Strategic Exports and Sanctions Enforcement (SE&SE) team in HMRC’s Fraud Investigation Service (FIS) had 101 full-time personnel, 41 of whom were engaged in sanctions enforcement work, with a primary focus on Russia.
HMRC disclosed data on the number of criminal investigations opened into potential sanctions offences from 2021-2024, which have been steadily increasing from 0 in 2021 to 29 in 2024 (please see below):
| Year | Number of investigations opened into potential sanctions offences |
| 2021 | 0 |
| 2022 | 14 (all related to Russia sanctions) |
| 2023 | 22 (20 related to Russia sanctions) |
| 2024 | 29 (27 related to Russia sanctions) |
HMRC works closely with domestic and international partners to ensure effective enforcement and prompt detection of breaches. While HMRC is responsible for enforcing both fiscal and non-fiscal trade controls at the UK border, which involves trade sanctions and strategic export controls, it is the Office of Trade Sanctions Implementation (OTSI) that is in charge of detecting breaches of trade sanctions within its remit, and the Office for Financial Sanctions Implementation (OFSI) is responsible for detecting breaches of the Oil Price Cap.
HMRC has acknowledged that unlike OFSI, it is not always going to provide details of sanctions breaches. As part of its sanctions enforcement procedures, HMRC uses a different set of measures, including seizures, compound settlements and warning letters, as well as referrals for prosecution, all aimed at correcting non-compliant behaviour.
Compound settlements are used when companies voluntarily disclose sanctions breaches to HMRC and cooperate with investigators to rectify underlying failings and strengthen internal controls. In the financial years 2021-2022, 2022-2023 and 2023-2024, six companies received compound settlements for breaches of Russia sanctions, and one company paid a settlement for breaching Iran sanctions. The compound settlement amounts for sanctions breaches varied between £1,000.00 and 1,000,000.00.
HMRC currently has 30 ongoing criminal investigations into sanctions breaches, 27 of which relate to Russia sanctions. None of these investigations have yet resulted in prosecution, however, one of the ongoing investigations was referred to the Crown Prosecution Service in October 2024 and is awaiting a decision.
Sanctions breaches, including breaches of strategic export, is a serious offence, punishable by hefty fines and imprisonment. In 2023 alone, HMRC, together with other agencies, detained 128 individuals and conducted five criminal investigations. It issued 216 warning letters and reached nine compound settlements totalling £2,276,390.77. The 2024 data will be published later this year.
It is important that your company has adequate sanctions policies and systems in place to ensure that you are fully compliant with various UK and international laws and regulations. Gherson lawyers have years of experience advising individuals and businesses across the world on their compliance programmes. We can assist with training your company’s personnel or advise you on developing your existing sanctions policies and systems.
Updated: 27 November 2025
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