On 12 September 2024, the UK Government laid before Parliament the Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024. The latter introduced new civil enforcement powers for the Office of Trade Sanctions Implementation (OTSI), part of the Department for Business and Trade. OTSI will be launched in October 2024, and its enforcement powers will come into effect from 10 October 2024.
On the same day, the UK Government published the Trade, aircraft and shipping sanctions (civil enforcement): Guidance, which sets out the requirements imposed by the new regulations and explains how those measures will be enforced.
Under the new regulations, OTSI will be able to impose civil monetary penalties in respect of non-compliance with trade, aircraft or shipping sanctions, including those relating to Russia.
The Secretary of State can also publish reports about breaches of sanctions regulations, regardless of whether a monetary penalty has been imposed.
It is a criminal offense to not comply with trade, aircraft or shipping sanctions or reporting obligations and information requests. Similar to financial sanctions breaches, failure to comply with trade, aircraft and shipping sanctions is a strict liability offence. Regulations 6 and 7 of the new regulations state that in respect of trade, aircraft and shipping sanctions respectively, any defence that a person did not know and had no reasonable cause to suspect that an offence had been committed is to be ignored.
OTSI can also impose penalties on the basis of the civil standard of proof – the balance of probabilities.
The maximum monetary penalty for breaching sanctions regulations is either £1 million or 50% of the estimated value of the breach – whichever is higher.
The requirements imposed by the new regulations have extraterritorial effect and apply within the territory of the United Kingdom (including Northern Ireland) and in relation to the conduct of all UK persons wherever they are in the world. They also apply to all companies established in any part of the UK as well as to branches of UK companies operating overseas.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
