Civil monetary penalties for breaches of trade sanctions
Who can receive a penalty from OTSI and for which breaches, the level of the penalty, and the penalty process.
This guidance relates to the Office of Trade Sanctions Implementation (OTSI). OTSI will be able to exercise enforcement powers under The Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024 when it comes into effect on 10 October 2024. UK persons and businesses will need to comply with the new legislation from that date.
Overview
The Office of Trade Sanctions Implementation (OTSI), which is part of the Department for Business and Trade (DBT), can impose a civil monetary penalty (amongst other enforcement measures) for breaches of any of the trade sanctions which OTSI enforces.
(There are other types of trade sanctions which are enforced by HMRC, HM Treasury or Ofcom; these are not subject to OTSI’s powers).
Legislation
OTSI’s enforcement powers are set out in the Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024.
The power to make regulations to set up a civil enforcement framework for trade sanctions is contained in the Sanctions and Anti-Money Laundering Act 2018 (SAMLA).
Who can receive a civil monetary penalty from OTSI
OTSI can impose a civil monetary penalty upon any person or business that must comply with UK sanctions. This means:
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any individuals or businesses, within the territory and territorial sea of the UK
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any UK nationals or UK businesses established under UK law, wherever they are in the world
In the case of a corporate breach, OTSI can hold officers of the corporation personally liable and impose a penalty on them as well as the corporate body if the breach is either:
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committed with the officer’s consent or involvement
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attributable to the officer’s neglect
This also applies to:
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partners in a partnership
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members of unincorporated bodies that are managed by members
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members of governing bodies
This means OTSI can impose separate penalties on the legal entity and the officers who run it.
How OTSI will assess your case
OTSI may impose a civil monetary penalty where they’re satisfied that, on the balance of probabilities, you’ve either:
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carried out an activity which is prohibited by any of the UK’s sanctions regimes
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failed to comply with an obligation which is required by any of the UK’s sanctions regimes
Find out how OTSI assesses cases, possible outcomes and possible mitigating factors.
Amount of penalty
The maximum penalty OTSI can impose is the greater of £1 million or 50% of the estimated value of the breach.
They’ll assess the amount of penalty on a case-by-case basis, but it cannot exceed this maximum amount.
Penalties will be paid into the Consolidated Fund and be recoverable as a civil debt.
Instances when OTSI cannot issue a penalty
OTSI cannot issue you with a civil monetary penalty if:
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criminal proceedings are ongoing, or have taken place, against a business or person for the same breach
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the business or person has already been convicted for an offence in respect of that breach
What OTSI must tell you before they can impose a penalty
Before OTSI can impose a civil monetary penalty on you, they must tell you:
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that they intend to impose it
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the reasons why
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the amount of the penalty
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that you are entitled to make representations
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the date by which you must make any representations
They’ll consider your representations before making a final decision on whether to impose a penalty, and on the level of any penalty.
If they still decide to impose a penalty, they must tell you:
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what their decision is
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that you’re entitled to seek a review of their decision
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the date by which you must tell OTSI whether you want a review
Publication of breaches
OTSI may publish reports of the cases where they impose a civil monetary penalty.
They may also choose to publish details of cases which they assess to be a breach of sanctions where they do not impose a civil monetary penalty.
For cases where they impose a civil monetary penalty and publish case summaries, they may include (where relevant):
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who they imposed the civil monetary penalty upon (each person, company or entity)
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a summary of the facts of the case, including breach type, sanctions regime, the regulation broken, and whether there was voluntary disclosure
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the aggregated GBP value of the transactions which are in breach of the regulations
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why they imposed the civil monetary penalty
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the GBP penalty value imposed on each person
OTSI may also include any compliance lessons they want to highlight, to help others avoid committing a similar breach and any other information they feel is needed to give a true understanding of the case and their consideration of it.
They will not normally publish more than this summary.
Other enforcement measures
OTSI’s enforcement powers allow them to implement a range of other enforcement measures where they assess a breach of a trade sanctions has occurred.
Get help
Contact OTSI using the enquiry form.