Corporate report

OTSI Annual Review 2025-2026

Published 27 August 2026

1. Foreword

Sanctions promote our foreign policy values and objectives and underpin our national security. UK sanctions continue to be a vital tool, applied across an ever wider set of sectors and jurisdictions. Our Russia sanctions are the most extensive package of sanctions ever deployed by the UK.  

Trade sanctions ban or restrict the trade of goods and services that sanctioned destinations want and need, as well as ensuring that their economies do not benefit from access to UK markets and expertise. However, trade sanctions are only as effective as businesses’ compliance with them. The Office of Trade Sanctions Implementation (OTSI) was created in October 2024 to enhance the UK’s implementation and civil enforcement of trade sanctions to maximise their impact. 

Each day, OTSI caseworkers give effect to UK trade sanctions by, for example, carefully considering whether a licence application meets the purpose of the relevant sanctions or forensically analysing complex procurement chains to identify sanctions evasion. We use the insights we gain to enhance compliance support for businesses and shape new policy. 

I am pleased to present OTSI’s Annual Review for 2025-26 and the first annual publication of OTSI’s performance, covering the period 1 April 2025 to 31 March 2026. It builds on OTSI’s One Year Update, published in December 2025, and on the evidence the then Minister for Trade, Sir Chris Bryant, along with officials, gave to the Business and Trade Committee in February 2026.  

2025-26 was a successful foundational year for OTSI and it is already building beyond those foundations. As of April 2026, OTSI is now responsible for the majority of trade sanctions licensing and, since April 2026, has a new counter-circumvention tool, Sanctions End-Use Controls (SEUC), to prevent the export of goods suspected of diversion to Russia and other sanctioned destinations. We also regularly update our guidance to help businesses understand and avoid the circumvention tactics malign actors employ.  

Most recently, OTSI led implementation of the latest package of Russia trade sanctions, which are designed to clamp down harder on Russian energy revenues and further restrict access to the goods Russia needs to prosecute its war against Ukraine. 

It is often said that sanctions is a team sport. Partnership is, and will continue to be, key to OTSI’s impact and effectiveness. OTSI values its partnership with industry. We are committed to supporting businesses with compliance through licensing and guidance. OTSI’s trade sanctions enforcement partnership with HM Revenue & Customs (HMRC), and its close collaboration with other government departments, are key to ensuring sanctions are designed and implemented effectively. This is complemented by strong relationships with international partners and counterpart organisations in those countries, which seek to enhance the collective impact of sanctions and join up efforts to tackle circumvention and evasion. 

Thank you for your support through these early stages of OTSI’s journey. I look forward to continuing to work with you to make our trade sanctions as effective as possible in promoting global peace and security.

Anas Sarwar 

Minister of State for Trade

2. Cross-government sanctions roles and responsibilities

OTSI is a part of the Department for Business, Innovation, Science and Trade (BIST) and is responsible for the implementation and civil enforcement of trade sanctions. OTSI’s launch and the introduction of broader civil enforcement powers for sanctions in October 2024 marked a significant expansion in the government’s sanctions toolkit, architecture and capacity. 

The UK’s sanctions system is delivered by a broad range of government departments with distinct but connected roles. The Foreign, Commonwealth and Development Office (FCDO) sets overall sanctions strategy and policy. BIST, with FCDO and other departments where relevant, lead on trade sanctions.  Further detail on the roles and responsibilities across government has been published as part of the Cross-government review of sanctions implementation and enforcement.

Roles and responsibilities across government:

	Trade sanctions	Financial sanctions	Transport sanctions	Immigration sanctions
Measures policy	BIST FCDO	HM Treasury (HMT) FCDO	Department for Transport (DfT) FCDO	Home Office (HO) FCDO
Designations	FCDO	FCDO	FCDO	FCDO
Implementation	BIST	HMT	DfT	HO
Civil Enforcement	BIST	HMT	DfT	HO
Criminal enforcement	HMRC Police and Serious Fraud Office	National Crime Agency (NCA) Police and Serious Fraud Office	NCA Police and Serious Fraud Office	HO Police and Serious Fraud Office

3. Tackling non-compliance

OTSI is responsible for the civil enforcement of trade sanctions relating to UK services and activity outside the UK border. This includes third-country movement of sanctioned goods and the provision of sanctioned services in breach of UK sanctions. Our actions are risk‑led, informed by intelligence, and focused on maximising compliance and disrupting harmful activity.

3.1 Enforcement

OTSI’s enforcement approach

OTSI is committed to taking proportionate and fair action where breaches occur, using the full range of tools available to respond effectively to non‑compliance. In line with the UK government’s strategic approach to sanctions enforcement, we use a risk‑based mix of public and non‑public interventions to take appropriate action.  

Our toolkit includes both compliance‑promoting measures, such as engagement with businesses, public disclosure of details of breaches, requests for additional information and warning letters, as well as punitive measures, including civil monetary penalties or referrals to HMRC for criminal enforcement consideration. Compliance-promoting tools can often be just as effective at driving behavioural change and promoting future compliance, particularly where early engagement or remedial action can mitigate risk. Read OTSI’s detailed guidance for more on its approach to enforcement. 

While OTSI has not yet imposed any civil monetary penalties, we ended 2025-26 with a substantial number of investigations into potential breaches at an advanced stage.

Reporting to OTSI

Reports of potential breaches are a vital source of information on non-compliance and help to inform our understanding of wider trends and typologies. Providers of financial or legal services, and money service businesses, have a legal obligation to report suspected breaches of trade sanctions. However, anybody else can voluntarily submit a report. OTSI values and strongly encourages voluntary disclosure.

Table A1: Number of Suspected Breach Reports or Referrals Received by Quarter in Financial Year

Financial Quarter	Cases Received
Q1 2025/26	45
Q2 2025/26	51
Q3 2025/26	42
Q4 2025/26	40
Total	178

During 2025-26, OTSI received 178 reports or referrals relating to potential breaches of trade sanctions.

Table A2: Number of Cases Received by Regime in Financial Year^{[footnote 1]}

Regime	Cases Received
Russia (2019)	156
Belarus (2019)	4
Iran (2023)	4
Not sanctions related*	4
Other regime*	4
Myanmar (2021)	3
DPRK (2019)	1
South Sudan (2019)	1
Syria (2019)	1
Total	178

The majority of reports to OTSI were submitted by the financial services sector^{[footnote 2]}, in line with mandatory reporting obligations. A total of 111 cases (62%) were reported by sectors to which mandatory reporting obligations currently apply. These cover both self-reports (voluntary disclosures) and reports about breaches of trade sanctions by third parties.

We also receive referrals from other bodies, including 23 referrals received from other UK government departments during 2025-26.

Table A3: Number of Cases Received by Source in Financial Year^{[footnote 3]}

Source	Cases Received
Breach Report – Mandatory	111
Breach Report – Voluntary	25
Referral by other department or agency	23
Other sources	19
Total	178

Enforcement actions

OTSI’s powers came into force on 10 October 2024. These powers are not retroactive, so OTSI cannot investigate any breaches of trade sanctions which may have happened before that date. At the end of 2025-26, OTSI had a number of active investigations underway which are expected to reach decision points in 2026-27.  The length of time for a case to reach completion will vary depending on the complexity of the case, the process of gathering and assessing information and OTSI’s decision-making process.

Table A4: Number of Cases Closed by Outcome in Financial Year^{[footnote 4]}

Outcome	Cases Closed
No breach and no further action	41
Referred to HMRC	40
No recordable activity	9
Referred to other government department or agency	7
No view on breach, no further action letter	7
Total	104

In 2025-26, 104 enforcement cases were closed, with 41 for which no breach was identified and 40 cases which were closed by OTSI and referred to HMRC for a range of reasons, including criminal enforcement consideration or where potential breaches predate OTSI’s enforcement powers. This figure does not include other referrals to HMRC prior to case closure or information sharing as part of joint working.

3.2 Proactive enforcement

Intelligence-led enforcement

In 2025-26, OTSI established a dedicated intelligence function to identify emerging risks and potential breaches. The function looks at new non-compliance and evasion patterns, trends and typologies to improve our targeting and investigative capability. We work with partners across government to maximise impact and improve enforcement outcomes. This includes sharing intelligence on individual cases, and broader analysis that supports effective targeting in areas of shared priority. In 2025-26, approximately 6% of the cases opened by OTSI were proactively initiated. As OTSI’s intelligence function continues to develop, we aim to increase significantly the number of proactive and intelligence-led investigations.

3.3 Tackling sanctions evasion

How OTSI’s enforcement remit helps to tackle sanctions evasion

Sanctions evasion has become increasingly sophisticated, with Russia and other sanctioned actors seeking to exploit third-country routes and hide behind complex corporate structures. Detecting and disrupting this activity is a key objective of UK sanctions enforcement and central to OTSI’s mission. 

OTSI’s civil enforcement powers relating to services sanctions and prohibited activity beyond the UK border are vital for targeting circumvention. This includes activity where goods do not leave or enter the UK, but where UK services, intermediaries or facilitation may play an enabling role.  

In 2025-26, OTSI conducted a programme of research examining the mechanics of services-enabled trade diversion and circumvention. The outputs are helping us to enhance our investigative casework, identify policy gaps, develop targeted guidance and engage business to strengthen compliance.

Sanctions End-Use Controls: new powers to tackle circumvention

OTSI now has an expanded role and new powers to tackle diversion of goods and related technology to sanctioned destinations via third countries, as part of the government’s commitment to strengthening the toolkit to disrupt circumvention routes and uphold the effectiveness of UK sanctions.  

Sanctioned countries go to great lengths to circumvent our trade sanctions by purchasing goods and related technologies via intermediaries in third countries. In April 2026, Sanctions End-Use Controls were introduced to enable OTSI to scrutinise the export of goods to a third country where there is risk of diversion to a sanctioned destination. Where there is reason to believe that a shipment is at risk of being diverted to sanctioned destinations, OTSI can now require the exporter to apply for a licence in order for the export to proceed. If, following a rigorous assessment, there remains a clear risk of diversion, a licence will not be granted and the export will be prevented from leaving the UK. These powers are applied in a highly targeted way on a case-by-case basis. Information on how OTSI is applying Sanctions End-Use Controls will be included in future annual reviews.

4. Promoting compliance

Alongside taking enforcement action for suspected breaches, OTSI also aims to proactively prevent breaches of trade sanctions before they happen. Our goal is to support businesses with compliance by helping them understand sanctions and providing them with the confidence to meet their obligations. We do this by providing guidance to promote understanding; conducting targeted engagement with industry and running an effective licensing system to help businesses get it right from the start.

4.1 Engagement

Guidance

In 2025-26, we introduced new and updated guidance and published blogs to support businesses and other stakeholders.  Our guidance is regularly reviewed and kept up to date. We invite feedback from users on where we can improve or add to our guidance.   

OTSI is part of the new GOV.UK sanctions hub and FCDO’s enforcement pages, supporting a more integrated experience for stakeholders looking for information on sanctions enforcement across government.

New guidance and outreach: Countering Russian sanctions evasion

Business-facing guidance to counter Russian circumvention practices was first published in January 2025. This guidance aims to support businesses in identifying Russian evasion practices and developing strategies to mitigate the risk of their goods becoming targets of circumvention when exporting.   

It includes information on the range of goods at heightened risk of being diverted to Russia, ‘red flag’ indicators of potential sanctions evasion via circumvention and suggestions for compliance best practice and enhanced due diligence.  

The guidance supports sectors which face a higher than usual evasion risk and jurisdictions in which there may be entities which re-export to Russia, often without the knowledge of the government in that jurisdiction. In these circumstances, additional due diligence is recommended on the end-user. 

These lists are compiled from extensive analysis of trade flows. We look at trade flows relating to a comprehensive suite of exports, to a wide range of countries and then onward from these countries to Russia. The analysis includes, but is not limited to, those goods on the Common High Priority List, given Russia is seeking to procure a wide range of goods and components. 

OTSI regularly refreshes this analysis and updates the guidance accordingly. The guidance was last updated on 12 March 2026. A tailored version of the guidance targeted specifically at freight forwarders was published on 3 November 2025.

Outreach and business engagement

As part of our outreach efforts, we regularly engage with businesses and individuals across a wide range of sectors to help them understand their sanctions obligations, including through our programme of in-person events across the country. Our engagement strategy is proactive, targeted, and risk-based, combining broad outreach with more focused company-specific and sector-specific activity where we identify higher risks of sanctions circumvention. Our objective is to provide businesses with clarity and practical support to comply with UK trade sanctions.  

Our engagement with industry provides valuable feedback on how to improve sanctions legislation, address issues and gaps, as well as helping us to better target government engagement and guidance effort and resources.  

During 2025–26, we engaged with stakeholders across a wide range of industries, including professional and business services, logistics and freight, legal and accounting services, financial institutions, higher education, and exporters of higher-risk goods. Engagement took place through a mix of sector-specific roundtables, webinars, regional roadshow events, bilateral meetings, and written guidance 

In total, OTSI participated in over 60 stakeholder engagements during the financial year, reaching businesses across the UK. This built on an intensive programme of engagement in the run-up to and after OTSI’s launch. Alongside this, we handled 169 stakeholder queries, to answer questions and clarify compliance obligations.  

This breadth of engagement reflects OTSI’s commitment to ensuring that businesses are equipped to identify and manage sanctions risks in an evolving global trading environment.

4.2 Licensing

OTSI’s licensing approach

Licensing is a key component of effective sanctions implementation. An OTSI licence permits activity that would otherwise be prohibited under trade sanctions. Through licensing, we support businesses to trade compliantly with confidence.   

OTSI, acting on behalf of the Secretary of State, carries out rigorous assessments of licence applications to ensure that they meet the core purpose of UK sanctions as well as any applicable licensing considerations.  Our assessments are made on a case-by-case basis with the core principles of lawfulness and procedural fairness governing the approach to our casework. We are committed to ensuring our assessments are as timely as possible. 

OTSI can also issue and administer general trade licences, which are published on GOV.UK and can be used by anyone who is carrying out the activity authorised in the licence, though it did not issue or administer any licences in 2025-26.

Licence applications to OTSI

During 2025-26, OTSI was responsible for licensing the provision of professional and business services and other standalone services prohibited under the UK’s trade sanctions.  

During this period, OTSI received 51 licence applications. Of these, 50 applications related to the Russia regime and 1 application to the Iran regime. The majority of the Russia applications concerned the planned provision of professional and business services.

Table B1: Number of Licence Applications Received by Quarter in Financial Year

Quarter	Applications Received
Q1 2025/26	15
Q2 2025/26	10
Q3 2025/26	19
Q4 2025/26	7
Total	51

Table B2: Number of Licence Applications Received by Sector in Financial Year^{[footnote 5]}

Sector	Applications Received
Medical & pharmaceutical	12
Legal services	11
Food production & distribution	7
Financial services	4
Other [footnote 6]	4
Energy	3
IT & communications	2
Tourism services	2
Agriculture, forestry & fishing	1
Construction	1
Consultancy	1
Education	1
Retail & wholesale	1
Transport & storage	1
Total	51

Our average and median completion time figures include the time taken by applicants to respond to requests for further information (RFIs). Due to the complexity of most services sanctions licence applications, OTSI usually makes at least one RFI per application, but for larger applications or applications where the applicant might be unsure about how the regulations apply to their proposed activity, we may need to issue multiple RFIs.

Table B3: Time to Complete a Closed Licensing Application in Financial Year^{[footnote 7]}

Average Completion Time (working days)	Median Completion Time (working days)
96	89

Table B4: Number of Licence Applications Closed by Outcome in Financial Year

Outcome	Applications Closed
Granted	17
No licence required	8
Withdrawn by applicant	7
Closed – no response	3
Refused	2
Submitted in error	2
Total	39

Expanded licensing remit: OTSI’s new licensing responsibilities

On 27 April 2026, OTSI’s licensing remit expanded to cover licences for goods, in addition to services, for export to sanctioned destinations. Licensing of goods and ancillary services which are subject to both strategic export controls and sanctions remains the responsibility of the Export Control Joint Unit (ECJU). This is part of OTSI’s maturing and expanding role in supporting businesses with the implementation of UK sanctions. It also allows us to develop better insight into trade in sanctioned goods and services to support compliance and target resources and policy solutions at the areas of greatest risk. Future OTSI annual reviews will cover how we are delivering this broader licensing remit.

Alongside this expanded licensing remit, we have published updated guidance on how we carry out our assessment process, which also contains guidance on the information we require from applicants to complete our assessment.

5. Strategic policy and partnerships

Building relationships with partners domestically and internationally is crucial for:

• maintaining broad alignment in international sanctions policy which makes compliance easier for businesses and improves the collective impact of sanctions

• sharing information and intelligence to support policy development, align priorities and help make the implementation and enforcement of trade sanctions, domestically and internationally, as strategic and efficient as possible

• sharing good practice and expertise and mutually supporting the development of sanctions implementation capability here and abroad

5.1 Cross-government coordination

Working with UK partners

OTSI works in partnership with other UK implementation and enforcement bodies, including its enforcement partnership with HMRC, the NCA and the Financial Conduct Authority.  We also work closely with a range of implementation units in government: BIST’s ECJU and Import Control and Sanctions team, OFSI and DfT’s Centre for Transport Sanctions. We have formalised cooperation with a number of government departments and regulators through Memoranda of Understanding (MoUs). 

We also work closely with other departments to develop sanctions policy, advise and collaborate on implementation and enforcement of new measures and seek specialist input in relation to specific OTSI casework.  

In 2025-26, we contributed to the cross-government review of sanctions implementation and enforcement led by FCDO. We worked with OFSI, HMRC, the NCA and DfT to take forward actions from the review. Taking a coordinated approach, this included contributing to the UK Government’s strategic approach to sanctions enforcement, as well as the sanctions enforcement action page. 

Sanctions policy design is most effective when implementation is considered from the outset. We play an active role in shaping new trade sanctions measures and have contributed to the development and drafting of new trade sanctions regulations in 2025-26. We are committed to using operational insights to inform new policy and legislative priorities in 2026-27 and beyond.

New trade sanctions

Supporting the development of the latest package of trade sanctions on Russia, for which the enabling legislation was laid in May 2026, has been a major OTSI priority for 2025-26. The package ramps up pressure on Russia’s economy, including new restrictions designed to cut off key revenue streams that fund the Kremlin’s illegal invasion of Ukraine.  

The package expands the range of goods, technologies and services that it is prohibited to trade with Russia, including new restrictions on the maritime transportation of liquefied natural gas (LNG), a ban on importing processed oil products, and new powers to tackle the shadow fleet. This package brings additional licensing and enforcement responsibilities for OTSI, including the administration of a temporary general trade licence which authorises spot market trade from Russian LNG projects Sakhalin II and Yamal until 1 January 2027.  

We also supported the lifting of certain trade sanctions under the Syria regime as the country’s transition, following the fall of the Assad regime, progresses.

5.2 International partnerships

We are proud to be at the forefront of international dialogue on trade sanctions, along with FCDO and other members of the government’s sanctions community, and we use these channels to promote broadly aligned sanctions policy with key partners across the G7 and beyond. We co-chair multilateral working groups such as the Trade Sanctions Quad, which meets roughly quarterly and comprises the EU, the US and Japan alongside the UK. We frequently participate in international sanctions forums and bilateral discussions with key partners. Over 2025-26, we have undertaken a large number of international engagements, and along with the FCDO, regularly hosted other governments in the UK and joined virtual meetings.  

We have also delivered 17 outward visits which have included:

• delivering bespoke technical training to a number of British Overseas Territories, helping build capability for implementing and enforcing sanctions regimes

• presenting at sanctions conferences, such as in Malta, Brussels, and Estonia, while engaging directly with industry representatives and supervisory bodies

• developing operational relationships with sanctions enforcement units across Europe, to exchange experience, information and approaches

These international engagement channels allow us to collaborate on new sanctions packages, enhance shared international understanding of evasion methodologies, and work towards greater global consistency in implementation and enforcement practices, including with jurisdictions which are closely connected to the UK.

Strengthening international partnerships

International engagement was a key part of OTSI’s 2025-26 research programme into the effectiveness of services sanctions and the role of services in enabling circumvention. We conducted multilateral and bilateral engagements with numerous EU governments, seeking to share best practice and learn from countries with specific experience and insights on counter-circumvention. Working with host Member State governments, we held roundtables in each of the countries we engaged with – these roundtables included local businesses and thought leaders on sanctions in each of these jurisdictions. This programme of engagement has been valuable in cementing partnerships and facilitating ongoing coordination and collaboration in implementation and enforcement.

5.3 Continuous improvement

Digital and data transformation

We strive to continuously improve how we work, and identify how to maximise OTSI’s impact even further, including by using data and technology.

As part of our commitment to digital transformation, we are developing a new case management system (CMS). In the future, enhanced data management will make casework more efficient, aimed at improving the service for businesses.  

The new CMS will also support a more streamlined and efficient way to apply for a sanctions licence from OTSI. We are grateful to businesses using the OTSI licensing process for their patience as we continue to operate across the OTSI licensing portal and SPIRE. We have published guidance on how to apply for a licence and will update businesses on upcoming systems changes in good time. 

Performance management data has played an increasingly important role in shaping our operational decisions. Analysis informs how we prioritise work, direct resources, and identify where improvements can be made. 

Our online tools, where you can report suspected breaches, apply for a licence or submit a query, continue to streamline how businesses engage with us. We have implemented several new features, including GOV.UK One Login and the ability to save and return to a licence application.

6. Our future commitments

As OTSI continues to develop its expanded remit, we remain committed to supporting the effective implementation and enforcement of UK trade sanctions. In 2026-27, our priorities are to: 

• Support compliance: We will continue to embed OTSI’s new broader remit, following the expansion in OTSI’s licensing responsibilities and implementation responsibilities for new sanctions introduced in May 2026. We will continue to develop OTSI as a centre of excellence for trade sanctions, maintaining a high standard of service for businesses, enhancing and simplifying our guidance to help businesses meet their sanctions obligations, and expanding our engagement programme with events across the UK.  

• Tackle non-compliance and circumvention: We expect to make effective use of OTSI’s enforcement and Sanctions End-Use Controls powers through 2026-27 where we see risk and evidence that warrants it. We are committed to exercising our powers in a fair, proportionate and transparent way, including using our intelligence capabilities to identify emerging risks, spot trends and patterns and target our investigative capability.  

• Develop our digital capabilities: We will continue investing in digital tools and AI to improve the way we deliver our services. This includes further development of our CMS functionality and online services to support more efficient casework and a better experience for businesses engaging with OTSI. 

• Deepen our domestic and international partnerships: We will continue to collaborate with businesses, UK government and international counterparts so that trade sanctions remain effective and are coordinated globally. Collective effort will be key to sanctions compliance, particularly in tackling sanctions evasion.  

• Maintain transparency in our decision-making: We are committed to transparency in the exercise of OTSI’s powers and will continue to publish information about our decisions and performance, including through future annual reviews. We are also committed to making use of our disclosure powers, where appropriate, to help businesses better understand compliance expectations.

7. Find out more

If you have a general query relating to trade sanctions, contact us.  

If you are unclear whether action you are considering, or have already taken, could breach the regulations, you should consider seeking independent legal advice.  

If you think you, or someone else, may have breached trade sanctions, you should report a suspected breach of trade sanctions. If you’re a provider of legal or financial services (also known as a relevant person), you have a legal obligation to report a suspected breach of the trade sanctions that are enforced by OTSI. The guidance also explains how to report breaches to HMRC. 

Apply for a licence to provide sanctioned trade services.  

Find out more about the work of the Export Control Joint Unit at GOV.UK.  

Find out more about how to import goods under national or UN-level import controls, including sanctioned goods at GOV.UK.  

Read further guidance relating to UK sanctions.

1. Please refer to the technical annex on definitions and further information on individual regimes. ↩

2. The sector definitions do not match any other sector definitions reported by BIST. Moreover, these categories are not mapped directly to UK SIC 2007 sections or IS8 sectors. For more information on how the sectors are assigned please refer to the technical annex. ↩

3. Please refer to the technical annex on source definitions. ↩

4. Please refer to the technical annex on outcome definitions. ↩

5. The sector definitions do not match any other sector definitions reported by BIST. Moreover, these categories are not mapped directly to UK SIC 2007 sections or IS8 sectors. For more information on how the sectors are assigned please refer to the technical annex. ↩

6. ‘Other’ is a residual category and will be reviewed as application volumes grow, to assess whether additional named categories are warranted. ↩

7. Please refer to the technical annex for information processing times. ↩