Regulator outlines new OTSI enforcement powers for sanctions violations

The UK’s Solicitors Regulation Authority (‘SRA’) has issued guidance on the enforcement authority of the Office of Trade Sanctions Implementation (‘OTSI’), including the ability to impose penalties of up to £1 million or 50% of the breach value for trade sanctions violations.

The guidance, published 5 February, details OTSI’s enforcement role under the Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024, which took effect last October.

The office can now impose penalties ‘on a strict liability basis, determined by the balance of probabilities,’ it said.

‘Legal professionals are now required to report suspected breaches of trade sanctions to OTSI,’ the agency said, highlighting key risk areas including advisory services, trust and company services, client due diligence, litigation and commercial transactions.

The new enforcement framework mirrors that of the Office of Financial Sanctions Implementation (‘OFSI’), with OTSI focusing on trade sanctions compliance while OFSI oversees financial restrictions.

The guidance warns that failure to comply with mandatory reporting obligations for suspected violations ‘can constitute a criminal offence.’ It specifically flags risks around providing advice on corporate structures and transactions involving sanctioned entities.

https://www.sra.org.uk/sra/news/sra-update-136-trade-sanctions/