New Regulatory Duties For Insolvency Practitioners: What You Need To Know.
REGULATION AND RESPONSIBILITY IN A CHANGING LANDSCAPE
As of 14 May 2025, UK Insolvency Practitioners face new reporting duties under the amended Sanctions (EU Exit) Regulations. These changes, brought in through the Sanctions (EU Exit) Regulations 2024, expand the scope of existing financial sanctions and explicitly add IPs to the list of “relevant firms” with a legal obligation to report certain activities to the Office of Financial Sanctions Implementation.
While most insolvency appointments are unlikely to involve sanctioned individuals or entities, the consequences of non-compliance are serious. It is essential that all IPs understand what’s changed and ensure robust procedures are in place.
WHAT’S CHANGED – AND WHY IT MATTERS
Under the updated regulations, IPs must now report to OFSI if, in the course of their work, they know or reasonably suspect that:
A person is a designated person listed on the OFSI consolidated sanctions list,
A person has breached UK financial sanctions or related Treasury licence conditions,
They hold funds or economic resources for a designated or prohibited person.
This includes cases where the individual or entity may not be named directly, but is owned or controlled (directly or indirectly) by a designated person. IPs must report both initial suspicions and provide annual updates if they continue to hold affected assets.
WHAT DOES THIS MEAN FOR INSOLVENCY CASES?
These obligations apply across a wide range of formal appointments, including:
Liquidations (solvent and insolvent)
Company Voluntary Arrangements
Administrations
Individual and Partnership Voluntary Arrangements (IVAs and PVAs)
Bankruptcies, sequestrations, and trust deeds
However, roles such as LPA Receiverships or Independent Business Reviews fall outside these new rules, as they are not considered part of formal insolvency practice under the Insolvency Act 1986.
If an IP becomes aware of relevant information during an appointment, they must file a report as soon as reasonably practicable. For ongoing appointments involving sanctioned individuals or entities, an annual report is required by 30 November, detailing the nature and value of assets held as of 30 September.
KEY RISKS AND ACTIONS TO TAKE
Although affected cases are expected to be rare, the risk lies in failing to recognise when reporting is required. This makes early due diligence essential—checking the Consolidated Sanctions List should become a standard part of case onboarding procedures.
Voscap recommends that IPs and their teams:
Ensure their Nominated Officer (MLRO) is fully briefed on the changes,
Update internal compliance procedures to reflect the new reporting rules,
Establish clear reporting lines and staff training on how to handle suspicions,
Refer to OFSI’s official guidance and reporting templates when making disclosures.
A PRACTICAL STEP TOWARDS REGULATORY COMPLIANCE
While these changes may seem administrative, they reflect a wider trend: growing expectations on professional accountability and regulatory awareness. In the broader recovery landscape, compliance isn’t just a box-ticking exercise—it’s an opportunity to strengthen your firm’s credibility and future-proof your practice.
At Voscap, we help insolvency practitioners and company directors navigate today’s evolving regulatory and financial landscape with clarity. If you're unsure how these changes affect your practice or need support with case due diligence, our team is here to help.
For confidential guidance, contact Voscap today on 020 7769 6831 or email help@voscap.co.uk.
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