In the ever-evolving international trade landscape, recent developments in the UK’s sanctions enforcement regime have significant implications for businesses. In this article, Amiqus explores the newly created Office of Trade Sanctions Implementation (OTSI).
The Creation of OTSI and Enforcement Powers
OTSI has been created to strengthen and maximise the impact of the UK’s trade sanctions regime and leads on the civil enforcement of trade sanctions relating to UK services and international trade where the services and goods do not cross the UK border. Its enforcement powers are set out in The Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024 (TASSCER) and came into force on 10th October 2024.
These mark a significant shift in regulating and enforcing trade, aircraft, and shipping sanctions and include:
- Powers to impose a monetary penalty and make public disclosures of breaches
- Send out warning letters where monetary penalties are not deemed appropriate
- powers to require the provision of information (failure to comply may amount to a criminal offence)
- Enforces the reporting obligations placed on certain sectors
Maximum monetary penalties have increased to £1 million or 50% of the estimated breach value, whichever is higher and can be imposed on the basis of the civil standard of proof – the balance of probabilities.
Where there is evidence of circumvention or high levels of recklessness and serious evasion, OTSI can also refer such matters to HMRC, for consideration of criminal prosecution.
Importantly, they apply to:
- all UK persons, including businesses, wherever they are in the world
- any person, including businesses in the UK or the UK overseas territories
Further Information can be found via the Trade, Aircraft and Shipping Sanctions Civil Enforcement Guidance, which provides clarity on the enforcement process and outlines OTSI’s approach to investigating breaches. It also allows companies to understand their responsibilities and avoid penalties for non-compliance. Key aspects of the guidance include:
- Investigation procedures for potential breaches
- Methodology for calculating fines
- New reporting obligations for ‘relevant persons’ regarding suspected breaches
The Importance of Sanctions Screening
Whether or not the creation of OTSI may affect your business, wider sanctions regimes are becoming more stringent, and complex and penalties ever more severe.
Effective sanctions screening against key UK and international lists is critical no matter the size, shape or scope of your business. An effective sanctions screening tool:
- Save time and resources (and reduce the potential of manual errors)
- Is kept up-to-date with any changes or additions to lists
- Ensures global coverage against key lists (domestic & international)
- Deploys fuzzy matching technology to ensure different spellings/variations are captured
- Can continually scan and monitor your client/customer base and alert you when the lists change or when a client is added to a list
Using an automated system greatly reduces your exposure and risk of doing business with a designated person or entity – therefore reducing the risk of the significant financial penalties and reputational damage that can result.
In the same vein as good-quality Politically Exposed Person (PEP) and Adverse Media screening – the use of an effective solution also clearly shows to your regulator/supervisor how seriously you take such risks and can help show an audit trail/document the steps you have taken to mitigate risks.
How Amiqus can help
Amiqus can support and partner with you and your business by integrating class-leading sanctions, PEP and adverse media screening into your compliance framework.
Our screening capabilities include:
- Automated sanctions screening against key global lists and databases, including USA (OFAC) lists, UK Consolidated List, and UN & EU Sanctions lists
- International and domestic PEP screening against up-to-date, industry-standard databases
- Comprehensive adverse media screening using AI and machine learning: leverage technology to scan over extensive UK and international print and online media articles
- Automated ongoing monitoring capabilities across your client/customer lists for continuous oversight and risk assessment
- Simplified, auditable compliance processes: all compliance activities are documented with a date and time-stamped audit trail, ensuring a reliable record for audits or inspections
If you’d like to find out more, watch a short personalised demo today.
