The UK’s Office of Financial Sanctions Implementation (OFSI) has introduced The Sanctions (EU Exit) (Miscellaneous Amendment) Regulations 2026 (the “Regulations”), which came into force on 13 May 2026. The Regulations create new powers for the UK government to impose licensing requirements on exports where it considers there is a high risk of the goods or related technology being diverted to a sanctioned person or destination. For further details about the Sanctions End-Use Controls and other targeted amendments across the UK sanctions framework introduced by the Regulations, please see our previous post here.
The Regulations also broaden the “prior obligations” licensing ground across 28 UK sanctions regulations (but eliminate it from the Afghanistan (Sanctions) (EU Exit) Regulations 2020). The prior obligations licensing ground enables payments or transfers to satisfy obligations that arose before a person was designated under financial sanctions. The amendments expand the range of scenarios in which OFSI may grant a licence on this ground by no longer requiring the use of the designated party’s UK-frozen funds or economic resources to satisfy the obligation. In FAQ 185, OFSI provides additional context and explanation for these amendments and confirms that third parties can satisfy a UK-designated person’s prior obligations, provided that the obligation arose prior to designation and does not involve direct or indirect payments to another designated person. For UN-designated parties, these amendments are more limited and still require the use of the UN-designated party’s funds or economic resources, but the funds or economic resources available to be used are not restricted to “frozen” funds or economic resources.
While these amendments expand the potential scenarios in which designated parties’ prior obligations can be satisfied post-designation, OFSI retains discretion to refuse to grant a licence even when the conditions are met, or to authorise satisfaction of only a proportion of that obligation.
