OTSI: New UK Agency for Trade Sanctions Enforcement

On December 11, 2023, the UK government unveiled its plans to establish the Office of Trade Sanctions Implementation (OTSI). But how is it different from its cousin, OFSI, the Office of Financial Sanctions Implementation, down the road in London's Whitehall?

A key differentiator (before we explain the major one) is the government department they sit within. OFSI is part of HM Treasury, the UK government's economic and finance ministry.

OTSI, on the other hand, will be part of the UK's Department for Business and Trade. According to the press release, OTSI will take on the crucial role of civil enforcement for trade sanctions.

Why Was OTSI Created?

Answering this requires one word: Russia. In the information the UK government released publicly, Nusrat Ghani, Minister of State at the Department for Business and Trade, announced that OTSI's primary remit is to "strengthen enforcement and clamp down on companies dodging Russian sanctions."

And it's clear that Russian sanctions evasion by companies in the UK is a specific area that OTSI intends to target. The new trade sanctions unit's remit will seemingly involve going after companies who avoid sanctions by sending products through other countries.

Recommended reading from the sanctions.io blog: Increasing Scrutiny on Evading Sanctions: Compliance Officers, Beware

How Will OTSI Enforcement Likely Play Out?

As mentioned, OTSI's legal powers come into force in 2024 (no official date has been set). But what can we expect in terms of enforcement?

Experts agree that OTSI's launch will likely coincide with increased enforcement actions for non-compliance with Russian trade restrictions.

In a nutshell, companies operating in the UK jurisdiction found to be dodging trade sanctions will face stricter penalties.

Another point of interest is whether OTSI will work on a strict liability basis, like OFSI. If so, it means companies could be held responsible for violating trade sanctions without the need to prove intent or awareness of the violation. 

In simple English, excuses or claims of ignorance may not serve as valid defenses, and businesses must take proactive measures to ensure compliance with UK trade sanctions.

Recommended reading from the sanctions.io blog: OFSI's Priorities in 2024: What Does It Mean for Sanctions Compliance

OTSI Launch: What Next Steps Should Your Business Take?

As the launch of the Office of Trade Sanctions Implementation (OTSI) approaches, businesses operating within the UK jurisdiction should proactively take steps to ensure compliance with trade sanctions. Remember to:

Stay Informed: Stay updated on the specific policies and guidelines OTSI sets as it approaches its launch date.

Review Compliance Measures: Prepare to conduct a comprehensive review of your company's existing compliance measures to ensure they align with OTSI's mandated regulations.

Enhance Due Diligence: Consider enhancing your due diligence procedures to proactively minimize the risk of unintentional violations, especially in the context of potential strict liability enforcement by OTSI.

Stay Engaged: We'll be posting developments as and when we get them - follow sanctions.io on LinkedIn.

The Department for Business and Trade's OTSI Announcement on X

Final Thoughts & How sanctions.io Helps With Trade Sanctions Compliance

One of the best ways for companies operating within the UK jurisdiction to avoid trade sanctions penalties is to embrace sanctions screening technology.

sanctions.io is a highly reliable and cost-effective solution for sanctions screening. AI-powered and with an enterprise-grade API with 99.99% uptime are reasons why customers globally trust us with their trade compliance and sanctions screening needs. To learn more about how our sanctions, PEP, and criminal watchlist screening service can support your organization's compliance program:

Book a free Discovery Call.

We also encourage you to take advantage of our free 7-day trial (no credit card is required).