Committee publication · Correspondence · 24 February 2026
Letter to the Minister of State for Trade and HM Revenue and Customs relating to the enforcement of UK trade sanctions, 2 February 2026
From: Business and Trade Sub-Committee on Economic Security, Arms and Export Controls
Inquiry: The UK's trade sanctions regime
Summary
The Business and Trade Committee writes to the Minister for Trade and HMRC seeking detailed information on UK trade sanctions enforcement ahead of a planned evidence session. The letter expresses concern that enforcement activity appears weak compared to US enforcement, with only £3.7 million in penalties since 2022 and no publicly identified companies, contrasting sharply with US OFAC's $265.7 million in 2025 penalties.
Key findings
- UK has levied approximately £3.7 million in financial penalties since 2022 for trade sanctions breaches, compared to US OFAC's $265.7 million in 2025 alone, with no UK companies publicly identified
- OTSI, established October 2024, has not publicised a single enforcement action despite receiving 146 reports or referrals of potential breaches and having investigations underway
- HMRC's eight anonymised 'compound settlements' provide no visibility of company names, goods involved, or breach nature, unlike OFSI's approach for financial sanctions
- Committee seeks clarification on OTSI's staffing, investigation numbers, penalty amounts, and whether companies will be publicly named when enforcement action is taken
- Committee questions whether Government has identified UK firms in supply chains for Common High Priority List items and what compliance activity targets these industries
Tone
CriticalTopics
Key actors
Liam Byrne MP, Sir Chris Bryant MP, John-Paul Marks CB, Department for Business and Trade, HM Revenue and Customs, Office for Trade Sanctions (OTSI), Office for Financial Sanctions Implementation (OFSI), Export Control Joint Unit (ECJU)
Notable line
“… the publicly available information on enforcement activity published by your Departments suggests there are, at present, limited practical consequences for UK companies that breach UK trade sanctions.”
Key Quotes
“We note that in 2025 alone, US sanctions enforcer OFAC publicised financial penalties for sanctions breaches totalling $265.7 million (£193 million), with offenders publicly identified. The UK by contrast has levied approximately £3.7 million in financial penalties since the start of 2022 for violations of trade sanctions, and it has not publicly identified a single company for the breaches involved.”
“While we are mindful of the legal limitations on OTSI's ability to apply civil enforcement action to breaches of sanctions that took place prior to its establishment in October 2024, it is striking that the Office has not publicised a single instance of enforcement action since then.”
“OTSI's first 'Corporate Report' from December 2025 notes that it had "received reports or referrals relating to 146 potential breaches" and had "a number of investigations underway", but lacked some key figures and facts to enable us to carry out effective scrutiny of its work.”
“HMRC has argued that, where businesses have taken steps to bring themselves into compliance after an "inadvertent sanctions breach", naming-and-shaming could have a "disproportionate impact on their reputation, and ability to trade" and anonymity "helps maintain an incentive for businesses to self-report […] non-compliance with trade sanctions".”
“It is unclear to us however if the Government has comprehensively identified the UK businesses that play important roles in the supply chain for CHPL goods, and monitors their international commercial activity to determine whether they may, inadvertently or otherwise, be part of supply chains that reach into Russia.”
Source · parliament.uk record ↗