Corporate report

Sanctions enforcement: technical note

Published 9 July 2026

Background

This note provides information on sanctions enforcement activities undertaken and outcomes achieved in the 2025 to 2026 financial year. This information was previously published in the United Kingdom strategic export controls annual reports.

HMRC’s role in sanctions enforcement

Sanctions are a vital foreign policy and national security tool used by the UK government to deter and disrupt threats and malign behaviour and demonstrate our values.

Accurate as of 28 May 2026, HMRC leads on the enforcement of trade sanctions that fall within its remit as the UK Customs Authority, namely:

• sanctions on goods moving to or from the UK
• the transfer of sanctioned technology from the UK
• services ancillary to those movements
• sanctions relating to goods subject to, or similar to those subject to, strategic export controls

The Office of Trade Sanction Implementation (OTSI) is the civil enforcement body for trade sanctions and its responsibilities relate to:

• the movement of goods and technology between a sanctioned country and a third country (not including goods subject to strategic export controls)
• the making available and acquisition of sanctioned goods and technology that do not cross the UK border
• services ancillary to these activities
• the provision of sanctioned standalone services, such as professional business services

HMRC has an enforcement partnership with OTSI. As part of this partnership, OTSI can refer serious cases to HMRC for criminal enforcement consideration. OTSI’s performance data for the financial year will be published as part of its Annual Review.

Enforcement activity undertaken by HMRC, Border Force and the UK prosecution authorities

HMRC continued to work with Border Force and UK prosecution authorities to undertake a wide range of enforcement activity through 2025 to 2026. The data below was previously published as part of the United Kingdom Strategic Export Controls Annual Report.

This activity included:

• 58 seizures of sanctioned goods — these are cases where goods destined for import or export were found to be in breach of sanctions

• 1 compound settlement issued by HMRC totalling £1,160,725.76 for a breach of The Russia (Sanctions) (EU Exit) Regulations 2019

• 18 HMRC warning letters issued as a result of voluntary disclosures

• 3 positive charging decisions by prosecuting authorities for 2 cases that are pending trial

HMRC assesses all sanctions breaches which fall within its customs remit. Where serious or deliberate breaches of the controls are identified, or where there are aggravating features, cases will be adopted for criminal investigation. These cases will be investigated and, if appropriate, referred to the relevant prosecution authority to determine a) whether there is sufficient evidence to prosecute; and b) whether that prosecution is in the public interest.

In relation to suspected breaches of UK trade sanctions, a total of 22 criminal investigations pursuant to prosecutions were ongoing in 2025 to 2026. Of these 22 criminal investigations, 2 are awaiting trial in the courts following positive charging decisions issued by the Crown Prosecution Service. The remaining investigations are ongoing.

A compound settlement is an agreement reached with HMRC in lieu of a referral to a prosecution authority for the consideration of a criminal prosecution. A compound settlement offer may be made once a case has been assessed as suitable for referral to a prosecution authority with each case thoroughly examined by specialist HMRC investigators. There is no obligation on a company to accept an offer, and they are free to decline, but the case will subsequently be referred to the relevant prosecution authority. Details of agreed compound settlements are published on GOV.UK.

In 2026 to 2027 HMRC plans to seek new legal powers to strengthen the department’s ability to publish details of companies that agree a compound settlement for strategic export and sanctions offences. The new approach will improve transparency and increase consistency between HMRC functions and enforcement outcomes on trade sanction offences across government.

HMRC continues to receive Voluntary Disclosures from companies who are concerned that they may have breached sanctions. These disclosures are assessed by HMRC, and appropriate action taken. This ranges from awareness visits to help companies to get it right going forward, the issuing of written warnings, through to compound settlements and, in the most serious cases, referral to UK prosecution authorities, for consideration for criminal prosecution. Table 1 shows the outcomes of voluntary disclosures made in 2025 to 2026.

Table 1: Voluntary disclosures outcomes in 2025 to 2026

Disposal	Total
Voluntary Disclosures received	29
Warning Letters issued as a result of voluntary disclosures	18
No Further Action (NFA) letter issued [note]	7
Compound settlement offers issued as a result of voluntary disclosures	1
Still under review	3

Note: Where no offence has been identified, lack of sufficient evidence, or not attributed to the company.

HMRC also assesses all referrals from OTSI under our enforcement partnership. Please see Table 2 for the volume of referrals and their outcomes for 2025 to 2026:

Table 2: Referrals from OTSI for 2025 to 2026

Category	Total
Total referrals received (2025 to 2026)	44
Under review	21
No further action (no evidence / below criminal threshold)	10
Used to support existing HMRC investigations	13

This referral process has been in place since OTSI was launched in October 2024. The initial referrals from OTSI have required extensive consideration, as this process bedded-in during 2025 to 2026. We are starting to resolve a number of cases currently under review.

HMRC works closely with the Office of Trade Sanctions Implementation in the Department for Business and Trade, the Foreign Commonwealth and Development Office and other departments and agencies to raise awareness of UK sanctions enforcement domestically and internationally. This activity strengthens links with other enforcement agencies and improves the capabilities of our international partners. HMRC supports the international sanctions commitments of the UK Government through its contributions to international operational expert groups. These groups help improve international controls and aim to strengthen enforcement by sharing expertise and best practice.

HMRC’s activity in 2025 to 2026 demonstrates a balanced, risk-based approach to enforcement, combining robust action with collaboration across government and international partners and continued support for business compliance.