In April 2025 Legal Services Threat Assessment published by the UK Office of Financial Sanctions Implementation (OFSI). The report provides a detailed analysis of the sanctions compliance risks facing UK legal services providers, with a particular focus on the period following Russia’s invasion of Ukraine in 2022. OFSI highlights the legal sector’s critical role in both enabling and detecting financial sanctions breaches, especially in connection with Russian designated persons (DPs) and their networks.
The assessment reveals that since February 2022, the legal services sector submitted the second highest number of suspected breach reports to OFSI, accounting for 16% of the total, second only to the financial services sector. Most of these reports came from solicitors’ firms and barristers’ chambers, while trust and company service providers (TCSPs) contributed only a small fraction—despite OFSI’s belief that not all breaches in that area have been disclosed.
Key findings in the report include the near-certainty that most non-compliance involves breaches of OFSI licence conditions, such as receiving payments exceeding licensed limits, conducting transactions after licence expiry, and delays in freezing or misdirecting frozen funds. OFSI also identifies a high likelihood that complex corporate structures, including trusts linked to Russian DPs and their associates, have been used to obfuscate ownership and control of assets subject to sanctions. Furthermore, there is credible concern that designated individuals have transferred assets to non-designated persons, in some cases in ways that could constitute sanctions breaches.
OFSI warns of a broad range of red flags that legal professionals should watch for, such as complex ownership arrangements, non-transparent trusts, and pressure or legal threats from clients to ignore compliance obligations. The report also notes frequent links to intermediary jurisdictions such as the British Virgin Islands, Cyprus, and Switzerland, which are commonly used to mask asset ownership.
Ultimately, the report underscores the professional responsibility of legal services providers to engage in due diligence, timely reporting, and risk-based compliance. OFSI encourages the legal sector to remain vigilant and to report suspected breaches proactively, as part of the UK’s broader strategy to uphold the integrity of its financial sanctions regime.