UK Launches Office of Trade Sanctions Implementation

On 10 October 2024, the Department for Business and Trade launched the Office of Trade Sanctions Implementation (OTSI), a new unit that was created in December 2023 and formed part of this government department. There are currently more than 20 sanctions regimes in the UK, and the government is looking to improve the implementation and enforcement of trade sanctions across the board.

OTSI’s objectives range from providing support to businesses on sanctions awareness and compliance, such as guidance and licencing, to detecting and responding to any suspected breaches of trade sanctions, such as civil enforcement. Trade sanctions are enforced with the partnership of HMRC that will retain the remit to bring prosecution if there is evidence of criminal wrongdoing.

OTSI powers apply to any individuals and businesses within the UK and its territorial waters and extends worldwide for UK nationals and businesses established under UK law. This includes civil enforcement and licencing. However, OTSI’s powers will not apply to the British Overseas Territories, such as the Cayman Islands and the British Virgin Islands. Criminal enforcement of trade sanctions will remain within the remit of HMRC with the assistance of the CPS.

OTSI’s powers of civil enforcement cover procurement and provision of sanctioned trade services, arrangements in relation to the acquisition or procurement of sanctioned goods outside the UK, including any ancillary matters, as well anything in relation to sanctioned technology being made available outside the UK.

OTSI is also responsible for issuing licences in relation to the provision of professional and business services that will otherwise be banned under various sanctions regimes in the UK. This excludes any ancillary services for the movement of goods that will remain within the remit of the Export Control Joint Unit.

The types of breaches that OTSI is empowered to investigate include circumvention of sanctions, failure to declare an exception, and any matters in relation to non-compliance with information requests, record keeping, reporting obligations and licencing. Depending on the extent of a breach and the level of culpability, the range of penalties that OTSI is entitled to impose may vary from a warning letter and a referral to a regulator to a monetary penalty and a referral to HMRC that will consider criminal prosecution.

Gherson lawyers can help you navigate the complexity of sanctions legislation, ensuring individuals and businesses are compliant. We can engage on your and your company’s behalf with UK regulatory authorities, including OFSI and OTSI, and apply for the necessary licences. We work with many international businesses in the development of corporate compliance policies, including those related to sanctions. Many businesses internationally look to us to deliver employee training, to ensure that employees are aware of the regulatory obligations for both them and their company.

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