A new trade sanctions unit has officially launched today, aimed at enhancing the effectiveness of the UK's sanctions against Russia. The Office of Trade Sanctions Implementation (OTSI) will
help businesses navigate and comply with trade sanctions, while taking strong action against those who fail to adhere to the rules.
This initiative follows the UK’s extensive sanctions regime, introduced after Russia's invasion of Ukraine, which has so far deprived the Russian economy of over $400 billion. The UK has sanctioned more than £20 billion in trade with Russia, as part of efforts to weaken Putin’s war efforts.
The OTSI will collaborate with industry leaders to make compliance with sanctions easier, providing guidance and accessible online tools for businesses. While most UK businesses have shown strong support for these sanctions, the unit will crack down on those in breach by publicizing violations and imposing civil penalties.
Business and Trade Secretary Jonathan Reynolds emphasized the importance of sanctions in cutting off funding for Putin’s illegal war. He stated, "Only by working hand in hand with businesses can we ensure sanctions are as effective as possible. This new unit will ensure compliance and take decisive enforcement action where necessary, continuing to put pressure on Putin’s regime."
Sanctions Minister Stephen Doughty added, "Our government is fully committed to strengthening the sanctions regime with robust enforcement for those who fail to comply. From Moscow to Tehran, kleptocrats and aggressors should be on notice."
The OTSI, part of the Department for Business and Trade, will issue licences, investigate breaches, and provide businesses with the support needed to adhere to sanctions regulations. New reporting obligations have also been introduced for financial services, money service businesses, and legal service providers, requiring them to notify OTSI of suspected sanctions breaches.
International sanctions expert Chloe Cina noted that this new unit is a sign that the UK’s sanctions response to Russia’s invasion of Ukraine is here to stay. She also highlighted that the OTSI will directly handle the most complex restrictions on professional services.
OTSI's enforcement powers complement those already held by HMRC, with OTSI focusing on sanctioned services leaving the UK and international trade in sanctioned goods and services involving UK businesses. Meanwhile, HMRC continues to handle the enforcement of sanctions on goods crossing UK borders. Photo by Pavel Kazachkov, Wikimedia commons.