International Trade News - Launch of the Office of Trade Sanctions Implementation

Launch of the Office of Trade Sanctions Implementation

The UK government has announced the launch of the new Office of Trade Sanctions Implementation (OTSI), within the Department for Business and Trade. This new sanctions body has been established to strengthen the enforcement of trade sanctions and support businesses with compliance.

What are sanctions?

Sanctions are restrictive measures that can be put in place to fulfil a range of purposes. In the UK, these include complying with UN and other international obligations, supporting foreign policy and national security objectives, as well as maintaining international peace and security, and preventing terrorism.

The UK may impose the following types of sanctions measures:

trade sanctions, including arms embargoes and other trade restrictions
financial sanctions, including asset freezes
immigration sanctions, known as travel bans
aircraft and shipping sanctions, including de-registering or controlling the movement of aircraft and ships

A full list of the UK’s sanctions can be found here

How does the OTSI work?

OTSI’s new enforcement powers for trade sanctions complement those HMRC already has. While HMRC remains responsible for the enforcement of trade sanctions on goods that cross the UK border as part of its customs role, OTSI now has lead enforcement responsibility for sanctioned services leaving the UK, as well as trade in sanctioned goods and services anywhere else in the world where a UK business or person is involved.

This launch also sees new reporting obligations introduced for financial services firms, money service businesses and legal service providers. They will now be expected to inform OTSI of suspected breaches of certain trade sanctions.

OTSI will work with industry to make complying with sanctions obligations as straightforward as possible by issuing guidance and user-friendly online tools.

To find out more about OTSI, to apply for a services sanctions licence and to report a breach, visit the OTSI’s website.

OTSI to boost effectiveness of UK sanctions against Russia

UK sanctions against Russia are set to be strengthened with the new unit to help companies comply with trade sanctions and penalise those who do not.

Following Russia’s invasion of Ukraine, the UK implemented its most comprehensive set of sanctions against a major economy, with over £20 billion worth of trade with Russia now sanctioned and depriving Russia of over $400 billion of funds since February 2022.

There has been overwhelming support from business in implementing sanctions against Russia, and the vast majority of businesses comply. For the minority that don’t, OTSI will have powers to publish information about sanctions breaches and impose civil monetary penalties.