Out-Law News 2 min. read

UK and US Treasury team up on Russia sanctions enforcement

The UK and US agreed to enhance their cooperation in implementing financial sanctions, in a bid to maximise the impact of the measures imposed on Russia following its invasion of Ukraine as well as to ease the compliance burden for business.

The agreement, which is aimed at enhancing the capabilities of both authorities, will bring their existing collaboration to a “new level”, according to a statement. 

The US and UK treasuries already worked together to develop common approaches to addressing their shared priorities like cyber threats and the misuse of virtual assets.

Under the enhanced partnership, the UK Treasury’s Office of Financial Sanctions Implementation (OFSI) and the US Treasury’s Office of Foreign Assets Control (OFAC) will further strengthen their working relationship at all levels. In practice, this will mean sharing best practices, identifying opportunities to pool expertise and think creatively about common challenges, exploring opportunities to align the way they implement sanctions, and assisting those impacted by the sanctions regimes either through joint products or by providing guidance resulting from collaboration behind the scenes.

OFAC director Andrea Gacki and OFSI director Giles Thomson, in a joint statement, said: “Financial sanctions work best when implemented multilaterally. This maximises their impact, minimises unintended consequences, and eases the burden of compliance for business.” 

Keen Stacy

Stacy Keen


One area where ‘UK Persons’ would benefit from further alignment is the UK following the US approach of issuing general guidance by way of FAQs and responding to interpretive guidance requests

The two enforcement agencies also recognised the growing scale of sanctions and the increased complexities of their implementation, and pledged to work closely with affected entities. 

“The commitment and willingness of stakeholders to constructively engage with us has been very welcome. We will of course continue, in close co-ordination with one another, to assist stakeholders via our outreach, by maintaining and updating sanctions-related products to provide useful information and guidance, and by making timely decisions regarding licences,” said Thomson. 

The statement also indicated that the OFSI will increase its resource to over 100 staff members by the end of the financial year, and over time the collaboration with OFAC will expand from Russia-related sanctions to include other common sanctions regimes. 

According to Pinsent Masons experts, the enhanced cooperation and engagement between the UK and US is not unexpected. 

“Since the UK implemented its autonomous sanctions regimes post the departure from the EU, it has aligned its financial sanctions regimes with aspects of the US equivalent, with an increasing use of thematic regimes, the issue of general licences authorising certain activities without the need to submit an application, and the introduction of a strict liability test for the imposition of civil penalties,” said Pinsent Masons’ financial sanctions expert Stacy Keen.

“One area where ‘UK Persons’ would benefit from further alignment is the UK following the US approach of issuing general guidance by way of FAQs and responding to interpretive guidance requests,” said Keen. 

Keen highlighted that in 2022 alone OFAC issued over 100 FAQs relating to Russian-related sanctions while the EU has published FAQs concerning its equivalent sanctions regime. To date, the guidance from OFSI, the Foreign, Commonwealth & Development Office, which is responsible for setting the UK’s sanctions policy, and the Department of International Trade’s Export Control Joint Unit (ECJU), which has responsibility for trade sanctions licensing, has been relatively light on the guidance front when compared to the US and EU.  

“Comprehensive guidance issued in a timely manner would assist industry and other stakeholders, described by OFSI and OFAC as being ‘at the forefront of implementing these sanctions’, to navigate the complexities of the sanctions regimes,” said Keen.

Rebuilding Ukraine
The prospect of Ukraine’s re-emergence as a modern country with a thriving economy when the war ends offers the chance to build something better, from physical and digital infrastructure to greater social value and a greener economy.
Rebuilding Ukraine
We are processing your request. \n Thank you for your patience. An error occurred. This could be due to inactivity on the page - please try again.