One Year of the Office of Trade Sanctions Implementation: What Businesses Need to Know

On December 4, 2025, the Office of Trade Sanctions Implementation (“OTSI”) published a report on its first year of operation, covering its activities from October 10, 2024, to October 9, 2025, in advance of the publication of its first annual review in 2026 (the “Report”).  OTSI’s mission is framed around two core objectives.  First, supporting compliance efforts to prevent violations of UK trade sanctions before they happen.  Second, maximising the effectiveness of UK trade sanctions through the use of licensing and robust enforcement.  The Report offers a number of insights into how OTSI interprets its mandate as the UK’s civil enforcement body for trade sanctions and has begun to operationalise its enforcement powers, as well as offering indications of the areas OTSI will prioritise in the year ahead.  Businesses that are required to comply with UK sanctions should familiarise themselves with the Report and take its insights into consideration when assessing the continued fitness for purpose of their trade sanctions compliance programmes and evaluating potential enhancements to existing sanctions compliance controls.

OTSI’s Operational Roles

Compliance

OTSI spent a significant amount of time before and after its launch engaging with business to raise awareness of UK trade sanctions and OTSI’s role in their implementation and enforcement.  Among other initiatives, this work has included the publication of practical case studies showing how sanctions evasion occurs in trade flows, as well as guidance on common sanctions evasion and circumvention tactics to help businesses identify warning flags and implement enhanced due diligence to protect themselves against involvement in such schemes.  OTSI also has conducted targeted briefings to support sector specific sanctions compliance.

Finally, OTSI has focused during its first year of operation on developing its understanding of sanctions circumvention risks in relation to services, including how service provision can enable the circumvention of trade sanctions on goods.

Licensing

Currently, OTSI is responsible for licensing the provision of trade services under the Russia sanctions regime, as well as other standalone services sanctions under a range of UK sanctions regimes.

According to the Report, in its first year of operation OTSI received 60 trade services licence applications, largely concerning professional and business services sanctions under the UK’s Russia sanctions regime.  Of those licence applications, 28 progressed to a final outcome during the period covered by the Report.  Those licence applications were disposed of as follows:

The Report indicates that the average time taken by OTSI to make a licensing decision during the review period (including time taken by applicants to respond to any OTSI requests for further information) was 82 working days (i.e., approximately three and a half months), with more or less time required depending on the complexity of individual licence applications.

A key factor identified in the Report as impacting the length of OTSI’s licence review and approval process was the quality of the information included in licence applications.  OTSI intends to publish additional guidance on the licence application and assessment process to help applicants better understand the process and improve the information they provide in initial licence applications, with a view to bringing down the time required to reach a licensing decision.

Enforcement

The Report underlines that robust enforcement is an essential component underpinning the effectiveness of UK trade sanctions.  OTSI is committed to taking appropriate and proportionate enforcement action when individuals or businesses breach or seek to circumvent UK trade sanctions and will look to use its civil enforcement powers under the Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024 (the “Regulations”) to highlight broader compliance lessons for industry flowing from its enforcement actions. 

OTSI currently has civil enforcement jurisdiction over trade sanctions relating to:

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

Where OTSI determines that a breach merits consideration for criminal enforcement, it may refer cases to HM Revenue and Customs (HMRC).

The Report identified information gleaned from mandatory reports of suspected sanctions breaches as a key source of information on potential sanctions breaches within OTSI’s enforcement purview.  In its first year of operation, OTSI received reports of 146 potential trade sanctions breaches, with the majority of those reports being submitted by the financial services sector.  Additionally, 16 percent of suspected breach reports received by OTSI during the review period were made by sectors not currently subject to mandatory reporting obligations.

The Report also discloses that, while OTSI has not yet imposed its first civil monetary penalty, it is actively investigating a number of potential sanctions breaches, has referred “a significant number” of cases to HMRC and other UK government partners, as well as sharing information with international counterparts using its powers under the Regulations.  OTSI has also articulated its commitment to using its powers to publish reports of breaches to support efforts by business to improve compliance and deter non-compliance. 

International Cooperation 

The Report underscores the extent to which OTSI’s work takes place within an international context.  In its first year of operation, OTSI has collaborated with the UK’s international partners, particularly across the EU, US, and G7, to share lessons learned, good practice, and case referrals.  OTSI also has worked with partners such as the Crown Dependencies, Overseas Territories, and Cyprus, sharing expertise and advice to support these partners in the set up and strengthening of their sanctions compliance and enforcement functions.  The Report clearly states that OTSI is committed to continuing (and increasing) these international engagement efforts in the future.

The Outlook for 2026

The Report identifies three key priorities for OTSI in 2026:

1. providing more compliance support to businesses;
2. expanding OTSI’s licensing remit; and
3. engaging in more proactive enforcement.

With respect to support for compliance, OTSI intends to engage with businesses operating in a broader range of industries and review existing trade sanctions guidance to identify areas where enhanced guidance can be offered to better support compliance efforts.  OTSI also wants to better support businesses outside London by expanding awareness of its trade sanctions roadshow series to additional parts of the UK.

OTSI’s trade sanctions licensing remit will also be expanded in early 2026 to cover all export sanctions licensing with the exception of activities involving goods and technology subject to strategic export controls, responsibility for which will remain with the Export Control Joint Unit.  Additional guidance on this changeover is expected in advance of the reallocation of licensing responsibility coming into effect.

Finally, enforcement will continue to be a key area of focus.  Specifically, OTSI intends to expand its capabilities to make use of actionable intelligence to support more proactive compliance monitoring, as well as looking at developing improved information sharing and more joined up intelligence analysis across government departments to better deliver effective and appropriate enforcement actions.

Conclusion

The Report reinforces the growing importance of familiarity with the UK’s rapidly expanding and increasingly complex roster of trade sanctions measures, as well as the potential enforcement risks associated with non-compliance.  The Report makes clear that businesses that are subject to UK sanctions jurisdiction should expect increased compliance monitoring and enforcement by OTSI (as well as the domestic and international sanctions enforcement agencies with which it cooperates and shares intelligence).  Consequently, affected businesses should ensure that they are aware of their compliance obligations and adopt a proactive approach to sanctions compliance that enables them to effectively identify and mitigate their trade sanctions risks, including by considering whether any enhancements to their sanctions risk assessment or compliance controls are required in light of the insights contained in the Report.  Businesses that align early with OTSI’s strategic direction likely will be best placed to navigate the UK trade sanctions landscape as it continues to evolve.  For more information on these developments and their impact, please contact the authors of this post, Alexandra Melia or Elliot Letts, in Steptoe’s Economic Sanctions team in London.