The new powers, awarded to the Treasury’s Office of Financial Sanctions Implementation (OFSI), will allow the government to charge up to £1m or 50% of the breach, whichever is higher.
As part of a wider range of measures to crack down on sanctions breaches in the Policing and Crime Bill, the government has launched a consultation on its proposed approach to imposing these penalties.
The economic secretary, Simon Kirby, said: “Financial sanctions are a powerful tool in defending our national security, but their strength has been diluted by those who breach sanctions regulations.
“These new cash penalties will incentivise everyone to comply with the rules, keeping our country safe and strong.”
Over 100 suspected breaches to financial sanctions in the UK were dealt with by the Treasury last year, with breaches ranging from deliberately channelling money to organisations or individuals subject to financial sanctions when their bank account or finances are frozen.
This year, the most expensive breach reached around £15m, which the Treasury said could see the perpetrators fined up to £7.5m under the new regime.
Rena Lalgie, head of the OFSI, added: “Financial sanctions are also about maintaining the integrity of and confidence in the UK financial services sector. That is why we won’t hesitate to take robust action where a breach merits it.
“Our new powers will support our work – allowing us to deal with serious sanction breaches quickly and effectively.”