UK issues new general licence allowing up to £4 million in legal fees for sanctioned persons

LONDON, Oct. 26, 2026 – The Office of Financial Sanctions Implementation (OFSI) has issued General Licence INT/2026/11112108, authorizing payments for legal services provided to individuals and entities subject to UK asset freezes. The licence takes effect on Oct. 29, 2026, and remains valid until April 28, 2027, unless varied, suspended or revoked by HM Treasury.

The licence covers designated persons and entities owned or controlled by them under UK autonomous sanctions regimes, including those targeting Russia, Belarus, Iran and other jurisdictions. It excludes persons designated for the purpose of complying with United Nations obligations. The authorization permits designated persons to pay legal advisers, law firms, barristers and providers of associated expenses, while allowing financial institutions and other payment processors to facilitate qualifying transactions. Legal services relating to defamation or malicious falsehood claims are expressly excluded.

The licence establishes two distinct payment mechanisms. Part A covers legal services arising from obligations entered into before a person's designation, while Part B applies to services not based on prior obligations. Each permits up to £2 million in professional legal fees and counsel fees per law firm, or per counsel directly instructed, including applicable VAT. Associated expenses are limited to 10% of those fees or £200,000, whichever is lower. Where both parts apply to continuing legal services, combined professional fees may reach £4 million, with associated expenses capped at £400,000, subject to the licence's conditions.

Part B also imposes hourly billing restrictions, including a £1,500 ceiling for counsel, inclusive of VAT, and prescribed rates for legal advisers based on experience and location. Payments may be directed to qualifying UK accounts or specified overseas accounts, including those in the United States, Canada and certain European jurisdictions, subject to the applicable conditions.

Recipients of payments must submit monthly reports to HM Treasury within 14 days of each calendar month's end, including relevant engagement documentation and invoices. Records of authorized transactions must be retained for at least six years.

The licence does not authorize funds or economic resources to be made available to designated persons. Its introduction provides a defined mechanism for financing legal representation while maintaining restrictions intended to prevent sanctioned parties from obtaining prohibited financial benefits.