OFAC and OFSI publish joint comparative guidance on US and UK sanctions

On June 23, 2026, the United States Department of the Treasury's Office of Foreign Assets Control (OFAC) and His Majesty’s Treasury's Office of Financial Sanctions Implementation (OFSI) published joint comparative guidance (Guidance) on financial sanctions regimes in the US and the United Kingdom.

The Guidance is the latest output of the OFAC–OFSI Enhanced Partnership, which the two authorities formalized through a joint statement in October 2022. OFAC and OFSI have since maintained regular exchanges on sanctions implementation and compliance, with this Guidance emerging from discussions held during a January 2026 meeting.

In this alert, we discuss key takeaways from the Guidance and practical considerations for businesses.

Key takeaways

The Guidance aims to assist the private sector in understanding its obligations under both US and UK sanctions regimes, providing a side-by-side overview of the authorities’ roles and responsibilities, legal frameworks, sanctions terminology, sanctions types, jurisdictional scope, prohibited and permitted activity, licensing, recordkeeping, reporting, and enforcement.

Specifically, the Guidance emphasizes that sanctions alignment between regimes does not mean legal equivalence. Compliance with one regime does not necessarily provide a safe harbor under the other. Therefore, businesses subject to both regimes are encouraged to assess US and UK sanctions requirements independently, even where the relevant sanctions measures share similar policy objectives.

Key areas of focus include:

1. Ownership and control: Similar concepts, different tests

The Guidance underlines that US and UK regimes diverge on how they treat non-listed entities owned or controlled by sanctioned persons.

First, under OFAC’s 50 Percent Rule, ownership interests held by multiple blocked persons are aggregated, so any entity that is owned 50 percent or more by one or more blocked persons, individually or in the aggregate, is treated as blocked. In general, OFSI does not aggregate interests held by different designated persons. Therefore, an entity in which multiple designated persons each hold less than the relevant threshold is generally not affected under the UK ownership test, unless the structure is designed to obscure control. The thresholds also differ: OFAC requires ownership to be 50 percent or more, whereas OFSI requires more than 50 percent.

Second, the UK assesses control as a freestanding test. An entity can be considered controlled, directly or indirectly, by a designated person even if the requisite ownership threshold is not met. Control may arise, for example, where a designated person has the right to appoint or remove a majority of the board, or where it is reasonable to expect that the entity’s affairs would be conducted in accordance with the designated person’s wishes. OFAC’s analysis, by contrast, emphasizes ownership and contains no equivalent standalone control criterion. That said, the definition of property under many US sanctions programs is extremely broad and businesses are encouraged to consider whether a prohibited party has a property interest in any transaction. For example, a transaction that creates a contingent property interest for a designated party would be prohibited.

These distinctions matter in practice. An entity may fall outside one regime but still be subject to restrictions under the other, particularly where the analysis turns on aggregation under the US rules or control under the UK rules.

2. Jurisdiction and extraterritoriality

The Guidance also highlights a difference in the scope and application of US and UK sanctions. US sanctions have explicit extraterritorial reach, including through secondary sanctions that apply to non-US persons even where there is no other US nexus. Non-US persons could also face exposure where they cause or conspire to cause US persons to violate US sanctions or engage in conduct that evades US sanctions.

UK sanctions, by contrast, rest principally on territorial and nationality-based jurisdiction. They apply to UK persons wherever they are located, activity within the UK or its territorial sea, and non-UK persons where there is a UK nexus.

3. Reporting, enforcement, and penalties

OFAC requires US persons to report rejected transactions, whereas OFSI has no equivalent obligation to report a rejected transaction. However, given the close coordination between the two authorities, businesses with a UK nexus that meet the reporting threshold for OFAC are encouraged to consider the merits of reporting to OFSI beyond what UK law strictly requires.

Enforcement and penalty frameworks diverge in other material respects. OFAC may reduce a base civil penalty by up to 50 percent for a qualifying voluntary self-disclosure, whereas OFSI may reduce a penalty by up to 30 percent. Both now apply strict liability for sanctions violations (OFSI for breaches occurring after June 15, 2022). They also differ in their limitation periods: While OFAC must bring a civil enforcement action within ten years of a violation, UK sanctions law has no limitation period.

The scope of the Guidance

The Guidance focuses on financial sanctions. Trade sanctions (including the UK’s Office of Trade Sanctions Implementation, whose responsibilities include guidance, licensing, and civil enforcement in relation to UK trade sanctions) and export control regimes fall outside its scope.

In addition, the Guidance does not indicate that the US and the UK are working in lockstep on sanctions policy. Recent Iran-related developments illustrate the point: OFAC issued a short-term general license permitting certain activities that would otherwise be prohibited under US sanctions on Iran, with no equivalent UK or European Union relief.

Despite coordination between the two authorities, the Guidance underlines that divergence remains in the content and application of US and UK sanctions. Businesses are encouraged to understand that coordinated policy objectives do not remove the need for separate, jurisdiction-specific sanctions analysis.

How DLA Piper can help

DLA Piper’s International Trade and Government Affairs teams advise sanctions compliance, risk management, and engagement with authorities. The firm is ready to help companies assess and navigate related risks and opportunities, including reviewing sanctions exposure across US, UK, and EU regimes; assessing ownership and control issues; advising on reporting and disclosure strategies; and engaging with relevant authorities.

For more information, please contact the authors.