The Office of Trade Sanctions Implementation (OTSI), part of the Department for Business and Trade (DBT), has released updated guidance outlining its enforcement powers since the foundation of OTSI in October 2024 according to new guidance by the SRA.
OTSI oversees the civil enforcement of specific trade sanctions, similar to the role of the Office for Financial Sanctions Implementation (OFSI) in financial sanctions. Its authority is derived from the Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024, which took effect on 10 October 2024.
Under these regulations, OTSI can impose monetary penalties of up to £1 million or 50% of the estimated breach value – whichever is greater.
A key update in the regulations is the mandatory reporting requirement for legal professionals. Lawyers and law firms must now report suspected breaches of trade sanctions to OTSI, and failure to comply may result in criminal liability.
Risks for the Legal Sector
Legal professionals should be aware of the potential impact of trade sanctions on their work, particularly in the following areas:
- Legal advisory services – providing guidance on corporate structures, contracts, or transactions that may involve sanctioned entities or jurisdictions.
- Trust and company services – establishing companies, trusts, or other structures that could be misused to circumvent trade sanctions.
- Client due diligence and risk assessment – conducting thorough background checks when dealing with high-risk clients or transactions.
- Litigation and dispute resolution – handling cases involving sanctioned individuals, entities, or assets while ensuring compliance with sanctions laws.
- Commercial transactions – managing mergers, acquisitions, or financial dealings related to restricted goods, technology, or services.