Sanctions Law 2025: How High-Net-Worth Individuals Can Stay Compliant and Protected

In 2025, high-net-worth individuals (“HNWIs”) face heightened exposure to global sanctions risk, especially those with ties to high-risk jurisdictions or complex international holdings. Sanctions regimes are expanding rapidly, targeting not just hostile states but also private individuals, companies, and luxury assets such as yachts, aircraft, and real estate. For HNWIs, understanding the evolving landscape and implementing robust compliance strategies is essential to protecting wealth and reputation.

The Growing Sanctions Risk for HNWIs

Sanctions have become a permanent fixture of the global financial system, with authorities in the US, UK, EU, and beyond imposing sweeping measures at unprecedented speed. The past years have seen thousands of individuals and entities designated, with entire sectors and asset classes swept into sanctions regimes. Since the start of the Russia-Ukraine conflict, the US and EU imposed asset freezes and transaction bans on more than 2,500 individuals, companies, vessels, and aircraft, demonstrating just how quickly and broadly sanctions can be applied.

HNWIs are particularly at risk if they:

• Hold assets or conduct business in high-risk jurisdictions:  Many HNWIs maintain investment portfolios, business interests, or banking relationships in jurisdictions that are subject to increased sanctions scrutiny, such as Russia, Iran, China, or offshore financial centres. Even indirect connections to these regions, through joint ventures or third-party service providers, can attract regulatory attention and increase the likelihood of compliance breaches.
• Have direct or indirect ties to politically exposed persons (“PEPs”) or already-sanctioned individuals: HNWIs with family, business, or social connections to PEPs or designated individuals may face increased due diligence from financial institutions and legal advisors. These associations, even if passive or historical, can raise red flags in compliance reviews and trigger reporting obligations or restrictions under sanctions regimes.
• Own high-value assets that are easily traced and targeted, such as luxury real estate, yachts, and private jets: Assets such as luxury real estate, yachts, private aircraft, and art collections are not only highly visible but also increasingly targeted by sanctions enforcement bodies. These items are often used to signal wealth and influence, making them attractive targets for asset freezes and public enforcement actions. Moreover, digital registries and international data-sharing initiatives have made it easier for authorities to trace beneficial ownership and seize or restrict access to such assets when sanctions are imposed.

What Happens if You are Sanctioned?

When an individual is designated under a sanctions regime, the consequences are immediate and severe:

• Asset Freezes: All assets located within the jurisdiction of the sanctioning authority are immediately frozen. This means the sanctioned individual loses access to bank accounts, investment portfolios, real estate, and other holdings. They cannot sell, transfer, withdraw, or otherwise make use of these assets without explicit authorisation from the appropriate body.
• Transaction Bans: Financial institutions, businesses, and service providers are legally prohibited from conducting any transactions with a designated person or any entities they own or control (typically defined as a 50% or greater interest). This includes not only banks but also law firms, insurers, real estate agents, and corporate service providers. Violations of these prohibitions can lead to severe penalties for counterparties, which means sanctioned individuals are effectively cut off from both domestic and international financial systems.
• Reputational Damage: Being designated under any sanctions regime can have an immediate and lasting impact on an individual’s personal and professional life. Beyond legal consequences, public designation may damage business relationships and discourage partnerships. Sanctions listings often attract media coverage and may trigger internal investigations by financial institutions or even criminal inquirers by appropriate agencies.

Asset freezes and transaction prohibitions are not limited to personal accounts, and they can extend to any company, trust, or vehicle in which the sanctioned individual has a significant interest.

Key Steps to take if Sanctioned

1. Instruct Legal Counsel Immediately: Engage specialist sanctions and asset protection lawyers to assess the scope of the designation and advise on next steps.
2. Asset Mapping: Identify all assets, entities, and accounts potentially affected by the sanctions order.
3. Disclosure and Reporting: Promptly disclose ownership structures and interests to relevant authorities, as required by law. Non-disclosure can worsen penalties and complicate any future legal challenge.
4. Seek Licences or Exemptions: In some cases, it may be possible to apply for licenses to access frozen funds for basic needs or legal fees.
5. Reputation Management: Develop a communications strategy to address the impact on business partners, employees, and the public.

Proactive Strategies to Limit Sanctions Risk

HNWIs can take several key steps to reduce the risk of being sanctioned or having their assets designated:

• Avoid High-Risk Associations: Steer clear of business dealings or personal associations with PEPs, sanctioned individuals, or entities operating in high-risk jurisdictions.
• Corporate Transparency: Maintain a well-kept, transparent corporate structure. Ensure that beneficial ownership and control information is up to date and readily available for disclosure to the relevant authorities.
• Enhanced Due Diligence: Regularly screen all business partners, counterparties, and investments against updated sanctions lists. This is especially critical for luxury assets and cross-border holdings.
• Robust Record-Keeping: Document all transactions, ownership changes, and compliance checks. This supports a credible defence if questioned by regulators.
• Regular Compliance Reviews: Periodically audit your holdings and structures for sanctions exposure, particularly when regulations change, or new jurisdictions are added to sanctions lists.
• Professional Advice: Work with experienced legal, financial, and compliance professionals who understand the nuances of sanctions law and can provide real-time guidance.

Special Considerations for Luxury Assets

Luxury assets, such as yachts, aircraft and high-value real estate are increasingly targeted by sanctions authorities. These assets are visible, valuable, and often held through complex ownership structures. To mitigate risk:

• Ensure full disclosure of beneficial ownership to all relevant authorities.
• Avoid using opaque offshore structures that may attract regulatory scrutiny.
• Conduct regular compliance checks on asset managers, crew, and service providers to ensure no links to sanctioned parties.

Conclusion

Sanctions law in 2025 demands vigilance and proactive compliance from HNWIs and professionals providing services to them, especially those with international exposure or luxury assets. By understanding the risks, maintaining transparency, and working with expert advisors, HNWIs can better protect their wealth and reputation in an era of aggressive sanctions enforcement.

Linkilaw is well positioned to assist HNWIs, their family offices or other advisors in navigating this evolving landscape. Our team offers practical legal advice on sanctions compliance, whether you are structuring international assets, reviewing your exposure, or addressing a potential sanctions concern. Linkilaw provides strategic, discreet, and commercially focused support to help you stay compliant and secure.