Category: Resources

The UK sanctions enforcement action framework has evolved rapidly since Russia’s invasion of Ukraine. On 6 January 2026, the government updated its sanctions enforcement action hub, adding a link to the Office of Trade Sanctions Implementation (OTSI) review and a blog explaining what makes a good breach report. This article explains how the enforcement landscape has changed, summarises key guidance and answers common questions raised by clients in the UK.

Overview of UK Sanctions Enforcement Action and Enforcement Bodies

Sanctions are restrictive measures used to support foreign-policy and national‑security objectives. The UK may impose financial sanctions (asset freezes and investment bans), director-disqualification sanctions, trade sanctions (including arms embargoes and other trade restrictions), transport sanctions and immigration bans. Enforcement is split across several bodies:

Office of Financial Sanctions Implementation (OFSI)

Part of HM Treasury. It handles civil enforcement of financial sanctions and the Russia Oil Price Cap. OFSI can impose monetary penalties and publishes decisions and “notes on compliance” to help the industry understand its expectations.

National Crime Agency (NCA)

Investigates and prosecutes criminal breaches of financial and transport sanctions. Recent high‑profile operations have included disrupting large money‑laundering networks linked to Russia.

Office of Trade Sanctions Implementation (OTSI) 

A new unit within the Department for Business and Trade. Created in October 2024, OTSI enforces trade sanctions relating to UK services and international trade where goods and services do not cross the UK border. It issues licences, investigates breaches and can impose civil monetary penalties.

HM Revenue & Customs (HMRC)

Responsible for criminal enforcement of trade sanctions and for all trade sanctions involving goods that cross the border. HMRC also enforces export controls and assists the NCA with prosecutions.

The sanctions enforcement action hub launched in November 2025 consolidates information from all four agencies. It lists monetary penalties, prosecution outcomes and disclosure notices, and provides case studies and annual reviews. The update on 6 January 2026 added links to OTSI’s first‑year review and a blog on breach reporting, making it easier for businesses to learn from enforcement cases.

OTSI’s First Year: Statistics and Lessons

OTSI was formally established when the Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024 (TASSCER) came into force on 10 October 2024. The unit enforces trade sanctions covering:

• the provision or procurement of sanctioned services;
• the movement, making available or acquisition of sanctioned goods or technology outside the UK; and
• ancillary services associated with sanctioned goods or technology.

Licensing and Business Support

OTSI is responsible for licensing the provision of professional and business services prohibited under UK sanctions. In its first year (up to 9 October 2025), OTSI received 60 licence applications, mainly concerning Russia‑related restrictions. Twelve applications were granted in full or in part, three were refused, seven were withdrawn and one was deemed not to require a licence. The average decision time was 82 working days, reflecting the complexity of applications. OTSI plans to publish further guidance to help applicants provide better information and shorten assessment times.

Enforcement and Compliance

Reporting by industry is a key information source for OTSI. During its first year it received 146 reports or referrals relating to potential trade‑sanctions breaches, mostly from the financial services sector; however, 16% came from sectors without mandatory reporting obligations. OTSI has not yet imposed any civil monetary penalties but has several investigations underway and has referred cases to HMRC and other government partners. The unit emphasises prevention: it engages with businesses, publishes guidance and administers licences to help firms comply.

Significantly, OTSI can impose civil fines up to £1 million or 50% of the value of the breach, whichever is higher. A strict‑liability regime applies, meaning that an intention to breach is not required for a penalty. OTSI can also require information and enforce reporting obligations. Serious cases may be referred to HMRC for criminal prosecution.

What Good Sanction Breach Reporting Looks Like

OTSI’s December 2025 blog explains why sanction breach reporting matters and provides a template for useful reports. Providers of financial or legal services and money service businesses are legally obliged to report suspected breaches of trade sanctions. Others can report voluntarily using the government’s online tool. The blog recommends that reports include:

• Contact details – name and email of the reporter.
• Details of the suspected breacher – names and addresses of the individuals or businesses involved.
• Other parties’ details – names and contact information of any other participants.
• Supporting documents – emails, contracts or other papers that explain the situation.

OTSI emphasises that a good report should:

• Explain the UK nexus – describe how the activity is linked to the UK.
• Provide a clear narrative – set out what happened in simple, honest language.
• Identify potential sanctions prohibitions – mention any rules that might have been breached, if known.
• Mention contact with other authorities – state if other regulators have been informed.

The blog stresses that OTSI values openness and honesty and would rather receive a concise report than none at all. All reports are handled carefully, and more detail reduces the need for follow‑up questions.

Cross‑Government Review and Consolidated Enforcement Hub

In May 2025 the Foreign, Commonwealth and Development Office (FCDO) led a cross‑government review of sanctions implementation and enforcement, which identified ten actions to improve compliance and deterrence. These actions included creating a consolidated enforcement hub, updating guidance and exploring civil settlement schemes. One headline commitment was delivered on 3 November 2025 when the government launched the sanctions enforcement action page, providing a single landing point for enforcement outputs and case studies. The hub aggregates decisions, press releases, blog posts and annual reviews from OFSI, the NCA, OTSI and HMRC, making it easier for businesses to learn from enforcement outcomes.

The review also noted industry feedback that maintaining two separate sanctions lists causes duplication. As a result, from 9 am on 28 January 2026 the UK Sanctions List will become the only authoritative list of UK sanctions designations; the OFSI Consolidated List will be retired. Businesses using the OFSI list must update their screening systems to use the UK Sanctions List and switch from the “OFSI Group ID” to the UKSL Unique ID. This change aims to simplify compliance and reduce the risk of missed designations.

Reporting Obligations and Penalties for Sanction Breaches

Who must report?

Certain firms – including financial service providers, money service businesses and legal services providers – have statutory obligations to report potential trade‑sanctions breaches. The list of mandatory reporters is detailed in guidance issued by OFSI, OTSI and the Department for Transport. However, anyone can report a suspected breach or circumvention attempt using the government’s online tool. Reporting protects the integrity of sanctions and helps law‑enforcement agencies tackle serious crime.

What are the penalties for sanction breaches?

For financial sanctions, the Policing and Crime Act 2017 and the Sanctions and Anti‑Money Laundering Act 2018 give HM Treasury powers to impose monetary penalties. OFSI’s guidance explains that it may impose a penalty when a breach of financial sanctions legislation occurs and sets out how it determines the amount and the rights of review and appeal. The maximum penalty is usually the greater of £1 million or 50% of the value of the breach.

 The Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024 extended these powers to trade sanctions enforced by OTSI. OTSI will consider mitigating factors such as timely disclosure and effective compliance systems, while aggravating factors like prior breaches or obstructive behaviour may increase penalties.

Criminal penalties can be severe. The NCA and HMRC investigate and prosecute intentional breaches; convictions can result in unlimited fines and imprisonment. HMRC has already issued multi‑million‑pound fines against exporters who contravened export controls. Businesses should therefore treat sanctions compliance as a core component of their risk management.

Whistle‑blower protections

Legislation enacted in 2025 amended the Public Interest Disclosure (Prescribed Persons) Order to cover reports of financial, transport and certain trade sanctions breaches. This change means workers who disclose suspected sanctions breaches to OFSI, OTSI or the Department for Transport qualify for whistle‑blower protections. The cross‑government review emphasised that expanded whistle‑blower legislation would encourage more reporting.

How We Can Help You

At Apex Accountants, we help businesses navigate the complex world of sanctions and export controls. Our team of accountants and compliance specialists offers:

• Sanctions compliance health‑checks – assessing existing systems against UK requirements and international best practice.
  
• Policy and procedure development – drafting tailored sanctions policies, screening workflows and escalation protocols.
  
• Licence application support – advising on whether a licence is required and assisting with applications to OTSI or OFSI.
  
• Breach reporting assistance – helping clients collate information and prepare concise breach reports that meet OTSI’s expectations.
  
• Training and workshops – providing staff training on sanctions awareness, reporting obligations and whistle‑blower protections.
  
• Ongoing monitoring – offering regular updates on sanctions developments and reviewing compliance programmes as the landscape evolves.

Conclusion

The UK’s sanctions regime continues to expand and enforcement is becoming more coordinated. The launch of a consolidated sanctions enforcement action hub and the upcoming move to a single sanctions list show the government’s determination to make compliance easier while increasing transparency and deterrence. Businesses should take these developments seriously: OTSI’s first‑year statistics underline that reports are being received and investigations are underway. With civil penalties of up to £1 million or 50% of the breach value and the prospect of criminal prosecution, firms cannot afford complacency. By investing in robust compliance frameworks, leveraging professional advice and embracing a culture of transparency, companies can mitigate sanctions risks and avoid costly enforcement actions.

Frequently Asked Questions

1. What is enforcement action in the UK?

Enforcement action refers to regulatory or legal steps taken by UK authorities to investigate breaches, impose penalties, prosecute offences and secure compliance with laws, including sanctions, tax, customs and financial regulations.

2. Under which act can UK sanctions be enforced?

UK sanctions are enforced under the Sanctions and Anti-Money Laundering Act 2018, alongside regulations made under it, allowing civil penalties, criminal prosecutions and licensing controls.

3. Who is the enforcement agency for sanctions in the UK?

Sanctions enforcement is shared between OFSI for financial sanctions, OTSI for trade and services sanctions, HMRC for customs enforcement, and the NCA for serious criminal investigations.

4. What are the consequences of breaching UK sanctions?

Breaches can lead to civil penalties, criminal prosecution, asset freezes, reputational damage, loss of licences and, in serious cases, unlimited fines or imprisonment for individuals and directors.

5. What is OTSI and how is it different from OFSI?

OTSI enforces trade and services sanctions where goods do not cross UK borders, while OFSI enforces financial sanctions such as asset freezes, investment bans and the Russia oil price cap.

6. How do I report a breach of sanctions?

Anyone can report suspected breaches using the government’s online service. Mandatory reporters must report promptly, providing details of parties involved, UK links, transaction information and supporting evidence.

7. What penalties can be imposed for sanctions breaches?

Authorities may impose civil penalties up to £1 million or 50% of the breach value. Serious cases can lead to criminal prosecution, unlimited fines, director liability and imprisonment.

8. What changes will occur on 28 January 2026?

From 28 January 2026, the UK Sanctions List becomes the sole official list. Businesses must update screening systems and identifiers to avoid relying on outdated or withdrawn sanctions data.

9. How can businesses prepare for stricter enforcement?

Businesses should update sanctions policies, screen customers and suppliers, train staff, maintain audit trails, strengthen due diligence controls and seek professional advice on compliance and risk management.