HM Treasury

HM Treasury is the United Kingdom's economic and finance ministry. It controls public spending, develops economic policy and houses the Office of Financial Sanctions Implementation (OFSI). Sanctions responsibilities are distributed across departments, regulators, investigators and courts. [1; 2]

Departmental and legal framework

The Sanctions and Anti-Money Laundering Act 2018 supplies powers for autonomous sanctions and implementation of international obligations. Section 1 identifies the Secretary of State and Treasury as appropriate ministers; the Act and each regime determine the powers available to them. A departmental description is not itself a designation or transaction prohibition. [3, sections 1, 3, 5 and 9-15]

The Foreign, Commonwealth and Development Office publishes the UK Sanctions List and exercises assigned designation functions. Treasury also has designation powers under the domestic Counter-Terrorism (Sanctions) (EU Exit) Regulations 2019. Designation and implementation are therefore distinct functions, but not an absolute division between two departments. OFSI, within Treasury, supplies financial-sanctions guidance, licensing and enforcement. [2; 4, regulations 5 and 5A]

OTSI handles specified civil trade-sanctions functions. Its annual review published on 27 August 2026 identifies its department as the Department for Business, Innovation, Science and Trade. HM Revenue and Customs handles border-related and criminal trade-sanctions enforcement; police, the National Crime Agency, prosecutors and courts have separate responsibilities. Referral of a suspected breach does not establish criminal liability. [5, sections 2-3 and cross-government responsibilities table; 6, Enforcement]

Financial sanctions practice

An asset freeze restricts dealings with assets that are owned, held or controlled within the applicable legal test. It does not itself change ownership, confiscate property or transfer assets to OFSI. The asset's owner should not be assumed to be the designated person merely because control triggered the freeze. As one regime-specific example, Russia regulation 11 covers funds or economic resources owned, held or controlled by a designated person. [7, sections 3.1 and 4; 8, regulation 11]

Exceptions and licences have different effects. An exception applies when its statutory conditions are satisfied; a licence permits specified activity under the relevant power. Russia regulation 64 allocates specified financial licensing powers to Treasury, and regulation 66 requires a licence to specify authorised acts and permits conditions, variation, revocation and suspension. Financial permission does not automatically supply a separate trade authorisation. [7, section 6; 8, regulations 64-66]

Under section 146 of the Policing and Crime Act 2017, Treasury may impose a monetary penalty where satisfied on the balance of probabilities that a financial-sanctions prohibition or obligation was breached. For this civil determination, relevant statutory knowledge, suspicion or belief requirements are ignored. That rule does not establish criminal guilt. The current enforcement guidance describes the distinct assessment and review processes. [9, section 146(1)-(1A); 10, sections 2.2-2.4]

OFSI's Annual Review 2024 to 2025 separates suspected breach cases, closed cases and enforcement actions, including warning letters, referrals and monetary penalties. These measures cover a specified reporting period and do not share a single outcome definition. Their counts cannot establish deterrence or sanctions effectiveness without a denominator, comparison and causal evidence. This is an interpretation of the report's categories, not a claim about the latest number of cases. [6, Enforcement]

Judicial control

In Bank Mellat v HM Treasury (No. 2) [2013] UKSC 39, the Supreme Court allowed the bank's appeal against a 2009 Treasury direction under the Counter-Terrorism Act 2008. The majority conclusions included substantive disproportionality and procedural unfairness, with different judicial alignments on those grounds. Lord Sumption's reasoning both required judicial scrutiny and recognised a substantial executive margin of judgement in national-security matters. [11, paragraphs 1-10, 20-28 and 49-50]

The judgment concerned that direction and its record. Lord Reed dissented on the application of the tests and the required procedure. The decision does not establish that every sanctions measure requires the same advance procedure or determine a later person's designation status. The separate No. 1 judgment concerns closed material and must not be confused with the No. 2 merits judgment. [11, No. 2 paragraphs 53-63 and 130; separate No. 1 judgment in the combined official PDF]

Statecraft significance and limits

Treasury's financial restrictions, licensing and fiscal responsibilities can support denial, coercion and resilience, but capability is not proof of effectiveness. Its Annual Report and Accounts for the year to 31 March 2026 records work through the G7, G20 and international financial institutions, including the G7 Extraordinary Revenue Acceleration initiative for Ukraine. Those are dated departmental accounts, not an independent assessment of strategic success. [1; 2; 12, International leadership and Russia and Ukraine]

Legal attribution must identify the operative regulation, decision and licence. A firm's refusal to transact can reflect its own risk judgement in addition to a legal restriction. Without a rule or direction requiring that refusal, the private decision should not automatically be attributed to Treasury. Current listings, individual licence validity and numerical asset totals require their own dated evidence and are not certified by this institutional overview. [7, sections 2-6; 8, regulations 11-15 and 64-66]

See also

Office of Financial Sanctions Implementation (OFSI) · Office of Trade Sanctions Implementation (OTSI) · FCDO Sanctions Directorate · Sanctions and Anti-Money Laundering Act (UK, 2018) · Bank of England · Bank Mellat v HM Treasury (UK Supreme Court, 2013) · G7 oil price cap and EU embargo on Russian oil (2022-present)

Sources

1. HM Treasury, About us, captured 26 October 2026 and reviewed 27 October 2026.
2. Office of Financial Sanctions Implementation, About us, captured 26 October 2026 and reviewed 27 October 2026.
3. United Kingdom, Sanctions and Anti-Money Laundering Act 2018, sections 1, 3, 5 and 9-15; revised text captured 25 October 2026 and reviewed 27 October 2026.
4. United Kingdom, Counter-Terrorism (Sanctions) (EU Exit) Regulations 2019, SI 2019/577, regulations 5 and 5A; revised text accessed 27 October 2026.
5. Office of Trade Sanctions Implementation, Annual Review 2025-2026, 27 August 2026; captured 26 October and reviewed 27 October 2026.
6. Office of Financial Sanctions Implementation, Annual Review 2024 to 2025: Effective Sanctions, 15 October 2025, updated 2 April 2026; retained capture 15 October 2026, reviewed 27 October 2026.
7. Office of Financial Sanctions Implementation, UK financial sanctions general guidance, updated 12 May 2026; captured 23 October and reviewed 27 October 2026.
8. United Kingdom, Russia (Sanctions) (EU Exit) Regulations 2019, SI 2019/855, regulations 11-15 and 64-66; revised text accessed 27 October 2026.
9. United Kingdom, Policing and Crime Act 2017, section 146, revised text accessed 27 October 2026.
10. Office of Financial Sanctions Implementation, Financial sanctions enforcement and monetary penalties guidance, captured 26 October and reviewed 27 October 2026.
11. Supreme Court of the United Kingdom, [Bank Mellat v HM Treasury (No. 2) [2013] UKSC 39](https://supremecourt.uk/uploads/uksc_2011_0040_judgment_32e27b53c6.pdf), 19 June 2013, paragraphs 1-10, 20-28, 49-76 and 130; official combined judgment captured 26 October and reviewed 27 October 2026.
12. HM Treasury, Annual Report and Accounts for the year to 31 March 2026, updated 6 August 2026; accessed 27 October 2026.