The UK's Office of Financial Sanctions Implementation issues a disclosure notice against Vanquis Bank for a significant delay in freezing a designated person's account, underscoring increased regulatory scrutiny on sanctions adherence within financial institutions.

On September 8, 2025, the UK's Office of Financial Sanctions Implementation (OFSI) issued a Disclosure notice concerning a breach by Vanquis Bank Limited related to financial sanctions rules connected to counter-terrorism. The breach involved an eight-day delay in restricting access to a designated person's (DP) account, which meant the individual was still able to withdraw funds and carry out transactions during that time. This stands out as one of OFSI’s most notable enforcement actions in 2025—marking the fifth civil enforcement case and the second Disclosure notice issued this year—showing that the regulator’s focus on strong sanctions compliance within financial institutions has become even more intense.

The incident happened when OFSI had given Vanquis Bank a heads-up about a customer who was about to be designated and therefore subject to an asset freeze due to supposed terrorist financing risks. Even after this warning, and the subsequent addition of the individual to the Consolidated List with an OFSI e-alert, the bank’s screening system only flagged a potential match the day after the listing. That match was then queued internally for manual review—here’s where things got tricky. During this review, the DP managed to withdraw a sum of £200 and made an additional purchase of £8.99 before the bank finally confirmed the match, and froze the account—eight days later. OFSI called this delay “inappropriate,” especially since it allowed funds to be accessible to someone on the sanctions list, breaking Regulations 11 and 12 of the Counter-Terrorism (Sanctions) (EU Exit) Regulations 2019.

Vanquis Bank’s screening process relied on two different suppliers—one to manage sanctions lists, and another to automate screening against customer data—and involved a two-tier review system to check potential matches. The bank had recently changed its screening procedures to address issues with false duplicate alerts, reallocating its resources toward manual reviews. However, this adjustment seems to have inadvertently contributed to a lack of resources —meaning they couldn’t act quickly enough on OFSI's warning. It's worth noting that the disclosure doesn’t specify whether this breach happened in 2024 or 2025, but the example highlights how insufficient business continuity planning and resource management can pose serious risks in sanctions compliance.

OFSI judged the breach as “moderately severe,” but chose not to impose a financial penalty. The regulator did consider a few aggravating factors such as the failure to act on OFSI’s early warning, the direct transfer of funds to a DP, the long delay before freezing the account, and the fact that Vanquis Bank is regulated by the FCA—where higher standards of sanctions awareness and controls are generally expected. On the other hand, mitigating factors included the bank’s voluntary self-reporting, cooperation during investigations, the relatively modest amount involved, and the lack of any deliberate effort to facilitate the breach. Based on this, OFSI decided to publish the enforcement notice without issuing a penalty.

This case aligns with OFSI’s broader enforcement efforts, as outlined in their July 2025 consultation on reforms to sanctions enforcement. Among the proposed measures were caps on discounts for voluntary disclosures, a new discretionary settlement scheme, and higher maximum penalties—increasing from £1 million or 50% of the breach’s value to as much as £2 million or 100% of the transaction amount. These measures are designed to give OFSI stronger enforcement tools and to encourage firms to be more proactive in compliance. Interestingly, this approach is quite different from HM Revenue & Customs’ (HMRC) way of handling export control sanctions violations, where penalties can also be significant but disclosures tend to remain confidential. OFSI’s approach of public disclosures, even when no financial penalty is applied, signals their emphasis on transparency and deterrence in the market.

Industry observers note that after the upheavals following Russia’s invasion of Ukraine in 2022, OFSI and the FCA have ramped up their enforcement efforts quite considerably. While OFSI’s penalties are still relatively modest compared to agencies like the US Office of Foreign Assets Control (OFAC), this trend indicates that the regulatory environment is tightening, and financial institutions need to sharpen their sanctions screening and response processes. The Vanquis Bank incident — well, it’s a clear reminder of what can go wrong if internal controls or resources aren’t kept up-to-date or sufficiently robust.

Financial services firms are really encouraged to treat OFSI notifications with the utmost seriousness. They need to ensure their sanctions screening systems aren’t just technically solid but also backed by enough human oversight and contingency plans. Regular reviews and updates of compliance procedures are absolutely crucial—especially when risks evolve or new regulations come into force. Failures in financial crime controls, as recent FCA fines against institutions like Starling Bank demonstrate, only underline how vital sanctions compliance is as a foundational part of financial security and regulatory trust.

This Vanquis Bank disclosure definitely serves as a warning about how even small delays in freezing accounts against designated persons—despite warnings or alerts—can lead to enforcement action. It reminds companies licensed by the FCA that they really need to embed resilient, responsive sanctions controls into their operations. As OFSI’s enforcement efforts become more aggressive and transparent, firms must prioritize managing sanctions risks as a core element of their wider financial crime prevention strategies.

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Source: Noah Wire Services

Verification / Sources

Noah Fact Check Pro

The draft above was created using the information available at the time the story first emerged. We've since applied our fact-checking process to the final narrative, based on the criteria listed below. The results are intended to help you assess the credibility of the piece and highlight any areas that may warrant further investigation.

Freshness check

Score: 10

Notes: The narrative is based on a press release issued by the UK's Office of Financial Sanctions Implementation (OFSI) on 8 September 2025, detailing a sanctions breach by Vanquis Bank Limited. This press release serves as the primary source, ensuring high freshness. No earlier versions with differing figures, dates, or quotes were found. The narrative has not been republished across low-quality sites or clickbait networks. The inclusion of updated data in the narrative, such as the specific dates and amounts involved, justifies a higher freshness score. No discrepancies were noted between the press release and the narrative. The narrative does not recycle older material; it presents the latest information from the press release. Therefore, the freshness score is 10.

Quotes check

Score: 10

Notes: The narrative does not include direct quotes from individuals. Instead, it paraphrases information from the OFSI press release. Since no direct quotes are used, this aspect does not raise concerns about reused or fabricated content. Therefore, the quotes score is 10.

Source reliability

Score: 10

Notes: The narrative originates from a press release issued by the UK's Office of Financial Sanctions Implementation (OFSI), a reputable government agency responsible for enforcing financial sanctions. This source is authoritative and reliable, providing official information on the sanctions breach by Vanquis Bank Limited. Therefore, the source reliability score is 10.

Plausability check

Score: 10

Notes: The narrative aligns with the details provided in the OFSI press release, including the timeline of events, the nature of the sanctions breach, and the regulatory response. The information is consistent with known facts and does not present any implausible claims. The language and tone are formal and appropriate for a government press release. Therefore, the plausibility score is 10.

Overall assessment

Veredict (FAIL, OPEN, PASS): PASS

Confidence (LOW, MEDIUM, HIGH): HIGH

Summary: The narrative is based on a recent press release from the UK's Office of Financial Sanctions Implementation (OFSI), detailing a sanctions breach by Vanquis Bank Limited. The information is fresh, original, and sourced from a reliable government agency. The narrative is consistent with the press release and does not contain any disinformation. Therefore, the overall assessment is a PASS with high confidence.