December 14, 2023

UK Government to launch new unit to enforce export controls and trade sanctions


Other Author      George Walker, Trainee Solicitor

On 11 December 2023, the UK Government announced plans to create the Office of Trade Sanctions Implementation (OTSI), a new governmental body that will be responsible for inter alia the civil enforcement of UK trade sanctions, including those against Russia.1  OTSI’s remit will include investigating activity by companies who may be seeking to avoid sanctions by sending products via third countries.  It is anticipated that OTSI will launch in early 2024.

This announcement follows an increasing focus on trade sanctions enforcement, circumvention and evasion in the UK. In 2023 to date, HM Revenue and Customs (HMRC) has issued eight compound penalties in connection with trade sanctions violations totalling more than £2.1 million.2 Moreover, on 6 December 2023, the Office of Financial Sanctions Implementation (OFSI) and National Crime Agency, among others, issued a cross-agency red alert warning that Russia is attempting to circumvent sanctions to purchase restricted goods and services.

OFSI has wielded the power to impose civil penalties for financial sanctions since 2018, but there is no corresponding civil penalties regime for trade sanctions.  This latest development underlines the increasing emphasis on trade sanctions as a key tool in the UK Government’s response to the Russian invasion of Ukraine.

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