The interaction between insolvency law and sanctions – Administrative Court rejects VTB’s challenge to OFSI general licence

19 December 2025

The Administrative Court has today rejected a challenge by PJSC VTB Bank (VTB) against the Office of Financial Sanctions Implementation’s (OFSI) decision to amend a general licence– PJSC VTB Bank v HM Treasury [2025] EWHC 3359 (Admin). Maya Lester KC of Global Sanctions acted for VTB Capital (acting by its Joint Administrators) who appeared as an Interested Party supporting OSFI in resisting the claim.

VTB was sanctioned by the UK in 2022, which froze the assets of its UK subsidiary (VTB Capital). VTB Capital entered into administration in December 2022 when Teneo Financial Advisory Limited were appointed administrators.

OFSI issued a general licence to facilitate the distribution of assets from VTB Capital’s estate while its assets were frozen. The effect of the General Licence was to decriminalise the distribution of assets to VTB Capital’s creditors, including VTB Bank. OFSI subsequently amended the General Licence to facilitate certain deductions from any distributions to the Claimant. The deductions reflect the value of assets within the VTB Capital estate which are under the Claimant’s control or against which the Claimant had taken enforcement action in Russian courts.

VTB challenged the amendment to the General Licence under section 38 of the Sanctions and Anti-Money Laundering Act 2018. It argued that OFSI had exercised its licensing powers for an improper purpose; that the amendment was irrational; and that the decision-making process adopted by OFSI was unfair and interfered unlawfully with the Claimant’s rights under Article 6 of the European Convention of Human Rights.  The High Court (Mrs Justice Collins Rice) rejected all arguments and said:

• OFSI had not acted improperly because it had not “thwarted” the declared purposes of the amended licence. Its objectives were to uphold the Russia Sanctions Regulations, sanctions on VTB, and enable VTBC’s orderly administration. OFSI may amend licences to prevent undermining sanctions. The amended licence was designed to secure VTBC’s wind-down and protected unsanctioned creditors, meaning it was within its purpose [107]-[110].

• Parliament provided bespoke access to court under s.38 SAMLA for review of operative decisions meaning there was no breach of A6 ECHR [132].

• Fairness to VTB did not require consultation and any further process would have been impractical or pointless given urgency and VTB’s prior disengagement with the proposed scheme [191].

• OFSI was not obliged to obtain facts from VTB because the amendment addressed policy risks, not factual disputes [209].