Restricts new penalties applied to firm (8)

'restricts' is the definition.
('confine' can be a synonym of 'restrict')

'new penalties applied to firm' is the wordplay.
'new' becomes 'n'.
'penalties' becomes 'fines' (fine is a kind of penalty).
'applied to' says to put letters next to each other.
'firm' becomes 'co' (a firm is a company).
'n'+'fines'='nfines'
'nfines' after 'co' is 'CONFINES'.