OTSI (Office of Trade Sanctions Implementation)

OTSI (Office of Trade Sanctions Implementation) is the unit of the UK Department for Business and Trade that imposes strict liability civil penalties for breaches of UK trade sanctions. It opened on October 10, 2024, under the Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024, published on September 12. It took over from HMRC (His Majesty's Revenue and Customs) the civil enforcement of most UK trade sanctions: prohibited exports, and above all the services that go with restricted trade, from brokering to financing, insurance and reinsurance included. HMRC keeps criminal enforcement and the border. OFSI (Office of Financial Sanctions Implementation), at the Treasury, keeps financial sanctions and the price cap on Russian oil carried by sea. Liability is strict: OTSI does not have to prove that the operator knew or had reasonable cause to suspect, and the breach is established on the balance of probabilities. The penalty can reach 1 million pounds or 50 percent of the value of the breach, whichever is higher. Voluntary disclosure can cut it by up to half. For a London underwriter the shift is concrete. A cargo policy on parts that end up in Russia through a transit country, aviation cover kept in force on an aircraft run by a Russian operator, a reinsurance acceptance backed by listed goods. Each of these can be a prohibited service in its own right, with no designated person anywhere in the file. Screening names is therefore no longer enough; the customs code of the goods and their final destination have to be read. And when the loss comes, the indemnity under cover that should never have been written cannot be paid without a license.