Key takeaways
- Most organisations surveyed report confidence in understanding and complying with UK sanctions requirements, with confidence highest in financial services.
- Micro enterprises report the lowest levels of confidence and sophistication, suggesting a need for additional support.
- Many organisations report using GOV.UK guidance and tools (including OFSI guidance and the UK Sanctions List search tool) to support compliance
- Awareness of reporting obligations is high, but experience of reporting processes varies.
Overall, the survey reports “a largely positive shift in industry perceptions” since the government’s previous sanctions survey in 2024. Other 2025 results show that 82% of respondents conduct due diligence on third parties in their supply chain and 70% have documented processes to consider circumvention risks.
“The fact that 91% of respondents were confident they understood how to comply with sanctions is very positive,” says Sandy Price, AML Manager at ICAEW. “And it suggests the government has been thorough in communicating the message to firms.”
“That’s good news because if most respondents understand the sanctions regime, know how to interrogate their client base for sanctions and are screening, it suggests the likelihood of sanction breaches is lower among that industry population.”
“There is, however, a difference in sophistication and understanding based on firm size,” she notes, “which indicates the smallest firms may still need more support. Many ICAEW firms are micro-enterprises, so if you fall into this category, we have plenty of information and support we can point you towards.”
Why did the government commission a survey on sanctions perceptions?
The government initiated the survey to gauge organisations’ understanding of, and compliance with, the UK’s sanctions regime. It intends to use the findings to identify knowledge gaps, explore ways to improve compliance, and inform future sanctions implementation.
The survey, which took place in September 2025, was sent to more than 30,000 UK businesses and non-governmental organisations across a range of industry sectors, including financial and professional services, transport, consumer products, energy, healthcare, and trade in retail/consumer goods.
Of the 375 responses received, 48% of responses were from the financial services sector, followed by 18% from professional services. Almost half the responses were from micro, small and medium-sized enterprises, while 6% of respondents were FTSE100 and FTSE250 organisations.
“There was a good breadth of firms,” says Sandy. “It wasn’t only financial and professional services firms; and that's useful for our firms providing a broader perspective on how their clients are also dealing with sanctions.”
How do the results of the sanctions survey compare with ICAEW's findings?
The government’s findings across different sectors are broadly in line with ICAEW’s 2022 Thematic Review of sanction compliance in its largest member firms. “The escalation of the sanctions regime with the war in Ukraine was then relatively recent, but our firms were already well aware of the requirements and had effective procedures for interrogating their client base,” says Sandy.
“All firms that responded to our 2022 review were screening their client base for entities and individuals sanctioned by the UK government,” she notes. “They were also checking for individuals and entities sanctioned in other jurisdictions. Many firms were already alert to circumvention risks and extended their checks to include those with close links to clients.”
Do organisations find the sanctions regime burdensome?
More than half (54%) the respondents to the 2025 government survey see compliance costs as a 'moderate' or 'significant' burden.
“When we did our thematic review in 2022,” says Sandy, “many firms told us that obtaining adequate staffing resources was proving a challenge, as were the costs associated with the additional work required, and lack of clarity from Office of Financial Sanctions Implementation (OFSI).” Nearly half (47%) mentioned staffing resources as a challenge, while just over a quarter (26%) cited costs associated with additional work required.
Over half the sample ICAEW firms in the review said they had increased their external spend to support sanctions checks, with most of the additional spend going on legal guidance and use of third-party screening services.
“At that time, some of these challenges were associated with the speed of change,” explains Sandy. “Firms were responding quickly and bringing people in to manage the process.”
What guidance and tools are organisations using for sanctions information?
Almost one third (31%) of respondents used GOV.UK as their source of information, which was the most common reported source of sanctions guidance. Of these, 41% used OFSI guidance, while 26% used the Department for Business and Trade’s Office of Trade Sanctions Implementation (OTSI) guidance. Two thirds of respondents found the OFSI guidance either 'useful' (52%) or 'extremely useful’ (15%).
“OFSI recently updated its guidance,” says Sandy. “So, if firms haven’t familiarised themselves with that, it’s important to keep knowledge current.” The UK Sanctions List search tool has also recently been improved. “This tool allows you to search the UK Sanctions List for free,” she explains. “And the new format is more user-friendly.”
“If you’re a smaller firm, this means you can do extensive checks without the costs involved in using specific sanction screening software,” emphasises Sandy. ICAEW also provides a client screening service for member firms to check individuals and entities against global risk and compliance data, including sanctions. This service is free and each firm may carry out a maximum of three name checks per week.
How are organisations complying with sanctions reporting obligations?
More than four in five (84%) respondents were aware of reporting obligations for suspected sanctions breaches. Nearly three quarters (73%) of respondents were aware of the reporting process. Many organisations were also aware of new online reporting tools introduced by OFSI but had not yet used them due to their recent introduction.
One third of respondents found the reporting process for sanctions breaches ‘easy’ or ‘extremely Easy’, while 56% found it ‘neither difficulty nor easy’, and 11% ‘difficult’ or ‘extremely difficult’.
When it came to suspicious activity concerns, 39% had filed a suspicious activity report (SAR), with 64% reporting being 'confident' or 'extremely confident’ in understanding what constitutes suspicious activity.
“This level of reporting is similar to our 2022 findings,” says Sandy, “when eight out of 19 firms (42%) had made SARs in relation to sanctioned individuals or entities in the period covered.” At that time, 16% of firms had identified sanction breaches that they’d reported to OFSI.
Are there any barriers to legitimate business due to sanctions compliance?
The vast majority (75%) of respondents reported they did not experience barriers to legitimate business due to sanctions compliance. Of those that said they experienced barriers, these included: licensing, interpreting and applying ownership and control definition, divergence from overseas regimes, lack of an effective humanitarian exemption, and challenges to conducting financial transactions.
Barriers reported in this survey that hadn’t previously been raised include over-compliance and de-risking behaviour by the financial services sector, the pace of regulatory change, and internal resource constraints inhibiting compliance
“The barriers raised reflect some of the feedback from our firms,” says Sandy. Speed of change and differences between jurisdictions were also mentioned as challenges by respondents to ICAEW's 2022 Thematic Review.
“In terms of ownership and control, the sanctions definition is different from ownership for AML due diligence,” explains Sandy. “And it also differs by jurisdiction.”
In the UK, an entity is sanctioned if there is a sanctioned individual who owns more than 50%, but UK guidance also defines control for sanctioned purposes as applicable where: “It is reasonable to expect that the person would be able to ensure the affairs of the entity are conducted in accordance with the person’s wishes.”
“This means that firms have to explore this as an option, which might lead to ambiguities and inconsistencies in the application of control,” says Sandy. “To compound this, other countries may be applying control in a different way, so a company may not be sanctioned in the UK, but it might be sanctioned in another jurisdiction.”
Many firms tend to take the lowest common denominator by identifying all individuals or entities designated by the UK, EU or US (or by other jurisdictions) and complying with the full list in every country the firm operates in, regardless of whether an individual or entity is designated in each country.
Firms do this partly to simplify procedures and provide a single approach across their operations. It also addresses the situation where a UK member of staff is working in, for example, the US, on a client that is sanctioned by the UK but not by the US. The UK staff member can’t provide services to that client, but US staff could. This approach comes with a compliance cost, however, where there isn't an exact match across all the jurisdictions. Screening tools can help firms identify which sanctions apply where, to reduce this burden and deliver a more jurisdiction-by-jurisdiction approach.
What is OFSI's latest strategy?
OFSI has recently published its new Strategy 2026-2029, reflecting the increased use of sanctions in the current geopolitical climate.
The strategy outlines OFSI’s renewed focus on enhanced understanding of threats grounded in data and insight; high quality licensing, enforcement and compliance support; and strong partnerships with industry, across government and internationally.
One of the key aims is to continue to engage with industry to “understand how sanctions are operating in practice and to make compliance as clear and workable as possible”. OFSI also says it will “provide more direct support to industry, to support compliance and reduce friction across the system”.
“The perceptions survey suggests the government has been successful in getting out its message to most firms,” says Sandy. “But it also shows there is scope for improving clarity in some areas, and for making compliance simpler for all organisations, including small firms.”
“It’s therefore positive to see OFSI has reiterated its commitment to engaging with firms, and listening to feedback,” she says. “The prospect of more direct help to support compliance is also encouraging.”