As the year came to a close, the Kharon Brief asked a range of industry leaders to assess 2025’s biggest storylines and what’s coming in 2026 in sanctions, risk and compliance.
Freya Page is Kharon’s director of global outreach.
Looking back: From an enforcement perspective, 2025 might be remembered as the year when European sanctions stopped being only a static legal obligation and started being enforced at scale, across increasingly complex trade, financial and ownership structures.
In the U.K., this was visible in OFSI’s first meaningful Russia-related monetary penalties. The Herbert Smith Freehills CIS LLP (HSF Moscow) case, for example, turned not only on a screening failure but on how sanctions risk was managed during a complex operational wind-down. OFSI’s focus was on whether reasonable steps were taken, how risk was escalated internally and whether decision-makers understood how sanctions applied in a fast-moving, real-world scenario. The message: Sophisticated organizations are expected to apply judgment, not just controls.
That shift was even more stark in the U.K.’s first criminal convictions under the Russia sanctions regime. The Ovsiannikov case centered on the use of intermediaries and family members to access funds and economic resources indirectly. It underscored that enforcement is now squarely focused on facilitating sanctioned actors, providing them indirect benefits and intentional circumvention on their behalf. It also underscored that sanctions violations are increasingly being treated as serious economic crimes rather than as technical non-compliance.
Alongside this, HMRC concluded a number of high-value compound settlements linked to Russia sanctions and export controls, with cases that often involved complex supply chains, third-country routing and diversion risk rather than direct Russia-U.K. trade. Germany, Denmark and the Netherlands brought similar cases, too.
Looking ahead: The most pressing issue both for governments and industry will be how effectively they address network risk—the reality that sanctions exposure increasingly sits several steps removed from any explicitly designated person or entity.
From their recent enforcement actions, EU member states and the U.K. appear to be increasingly concerned not just with direct dealings but with whether firms can identify hidden ownership, informal control, and facilitation across sprawling commercial, financial and logistical networks. Yet there remains a significant gap between these expectations and the tools many organizations still rely on. The next phase of sanctions enforcement is unlikely to be forgiving of firms that can demonstrate compliance processes but not understanding.
Freya Page is Kharon’s director of global outreach.
Looking back: From an enforcement perspective, 2025 might be remembered as the year when European sanctions stopped being only a static legal obligation and started being enforced at scale, across increasingly complex trade, financial and ownership structures.
In the U.K., this was visible in OFSI’s first meaningful Russia-related monetary penalties. The Herbert Smith Freehills CIS LLP (HSF Moscow) case, for example, turned not only on a screening failure but on how sanctions risk was managed during a complex operational wind-down. OFSI’s focus was on whether reasonable steps were taken, how risk was escalated internally and whether decision-makers understood how sanctions applied in a fast-moving, real-world scenario. The message: Sophisticated organizations are expected to apply judgment, not just controls.
That shift was even more stark in the U.K.’s first criminal convictions under the Russia sanctions regime. The Ovsiannikov case centered on the use of intermediaries and family members to access funds and economic resources indirectly. It underscored that enforcement is now squarely focused on facilitating sanctioned actors, providing them indirect benefits and intentional circumvention on their behalf. It also underscored that sanctions violations are increasingly being treated as serious economic crimes rather than as technical non-compliance.
Alongside this, HMRC concluded a number of high-value compound settlements linked to Russia sanctions and export controls, with cases that often involved complex supply chains, third-country routing and diversion risk rather than direct Russia-U.K. trade. Germany, Denmark and the Netherlands brought similar cases, too.
Looking ahead: The most pressing issue both for governments and industry will be how effectively they address network risk—the reality that sanctions exposure increasingly sits several steps removed from any explicitly designated person or entity.
From their recent enforcement actions, EU member states and the U.K. appear to be increasingly concerned not just with direct dealings but with whether firms can identify hidden ownership, informal control, and facilitation across sprawling commercial, financial and logistical networks. Yet there remains a significant gap between these expectations and the tools many organizations still rely on. The next phase of sanctions enforcement is unlikely to be forgiving of firms that can demonstrate compliance processes but not understanding.
