Monetary penalty notice
Monetary penalty notice
A monetary penalty notice, or MPN, is a formal document a UK regulator issues to impose a fine for breaching financial sanctions or anti-money laundering rules. The Office of Financial Sanctions Implementation uses the term for sanctions breaches under the Policing and Crime Act 2017. HMRC issues its own penalty notices for money laundering supervision breaches under a separate regime.
Key takeaways
- A monetary penalty notice is a formal, published fine for a sanctions or AML breach.
- OFSI’s maximum penalty is the greater of £1 million or 50% of the estimated breach value (Policing and Crime Act 2017, s.146).
- Since 15 June 2022, OFSI can fine on a strict liability basis, without proving the firm knew it was breaching sanctions.
- HMRC issues separate penalty notices under the Money Laundering Regulations 2017; its largest ever, against MT Global Limited, was £23.8 million before review.
- OFSI issued its first monetary penalty in February 2019: a discounted £5,000 fine tied to an Egypt sanctions breach.
- A financial sanctions breach can also be prosecuted as a criminal offence carrying up to seven years in prison, separate from any civil penalty.
On this page
What a monetary penalty notice isOFSI’s power to issue themHow OFSI calculates the maximum penaltyHMRC’s parallel penalty regime for AML supervisionNotable monetary penalty casesHow firms respond to a penalty noticeFAQsRead more
£1m or 50%
OFSI’s maximum sanctions penalty: the greater of £1 million or half the breach value
What a monetary penalty notice is
A monetary penalty notice formally records a regulator’s decision that a firm or individual breached a legal obligation, and sets out the fine imposed as a result. It’s a civil enforcement tool, distinct from criminal prosecution, though the two aren’t mutually exclusive for the same underlying conduct.
OFSI’s power to issue them
The Office of Financial Sanctions Implementation gained the power to impose civil monetary penalties for financial sanctions breaches under section 146 of the Policing and Crime Act 2017. Since 15 June 2022, OFSI can impose these penalties on a strict liability basis, meaning it no longer has to prove the firm knew, or had reasonable cause to suspect, it was in breach.
How OFSI calculates the maximum penalty
Where OFSI can estimate the value of a breach, the maximum penalty is the greater of £1 million or 50% of that estimated value. Where the value can’t be estimated, the cap is a flat £1 million. OFSI’s first-ever monetary penalty, issued in February 2019, was a £10,000 fine against R. Raphael & Sons plc, discounted to £5,000 for voluntary disclosure and cooperation, over a £200 payment connected to a sanctioned associate of former Egyptian president Hosni Mubarak.
HMRC’s parallel penalty regime for AML supervision
HMRC issues its own penalty notices under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, separate from OFSI’s sanctions-specific powers. HMRC supervises sectors including estate agents, accountants, trust and company service providers, and money service businesses, and has a statutory duty to publish details of the penalties it issues.
Notable monetary penalty cases
HMRC’s largest AML penalty to date was £23.8 million, issued to money transfer company MT Global Limited in 2021 for failures spanning risk assessment, controls, and due diligence, later reduced to £1.9 million on review. On the sanctions side, OFSI imposed a £465,000 penalty on Herbert Smith Freehills’ former Moscow office in March 2025, over six payments totalling roughly £3.93 million made in breach of Russia sanctions.
How firms respond to a penalty notice
A firm that receives a penalty notice can make representations to the regulator and, if that fails, appeal: to a minister in OFSI’s case, or through HMRC’s review and tribunal process. Beyond the appeal itself, most firms also move quickly to fix the underlying control failure, since a breach of financial sanctions can additionally be prosecuted as a criminal offence carrying up to seven years in prison, separate from any civil penalty already paid.
Spot red flags before they become a penalty
Work through the warning signs that precede most AML and sanctions enforcement action.
Frequently asked questions
What is a monetary penalty notice?
A monetary penalty notice is a formal document a UK regulator issues to record a breach of financial sanctions or AML rules and set out the fine imposed. It’s a civil enforcement tool, separate from criminal prosecution.
What is the maximum monetary penalty OFSI can impose?
Where OFSI can estimate the value of a breach, the maximum is the greater of £1 million or 50% of that value. Where the value can’t be estimated, the cap is a flat £1 million.
Does OFSI have to prove intent to issue a penalty?
Not since 15 June 2022. OFSI can now impose civil monetary penalties on a strict liability basis, meaning it no longer has to prove the firm knew, or had reasonable cause to suspect, it was breaching sanctions.
What is the largest AML monetary penalty HMRC has issued?
HMRC’s largest AML penalty to date was £23.8 million, issued to money transfer company MT Global Limited in 2021, later reduced to £1.9 million following review.
Is a breach of financial sanctions a criminal offence too?
Yes. A breach of financial sanctions can be prosecuted as a criminal offence carrying up to seven years in prison, in addition to, or instead of, any civil monetary penalty.
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Last reviewed July 19, 2026 · 6 min read · Written for compliance and risk professionals · By the WhoWiki editorial team
Key takeaway: A monetary penalty notice, or MPN, is a formal document a UK regulator issues to impose a fine for breaching financial sanctions or anti-money laundering rules. The Office of Financial Sanctions Implementation uses the term for sanctions breaches under the Policing and Crime Act 2017. HMRC issues its own penalty notices for money laundering supervision breaches under a separate regime.