Strengthening Trade Sanctions Compliance: Real World Lessons in Trade Sanctions Breach Detection

Firms should use OTSI’s online reporting tool to promptly report potential breaches or near misses. In the case study, the bank’s early submission enabled OTSI to quickly review the situation and confirm no breach has occurred, as payments were stopped before processing. Using the reporting tool not only demonstrates transparency but also enables regulators to fully assess the situation – helping firms avoid inadvertent breaches

Firms should adopt robust internal screening to flag and halt potentially prohibited transactions before processing. The UK branch of a multinational bank identified payments linked to sanctioned Russian goods through diligent account screening and enhanced due diligence. This proactive approach safeguarded both its business interests and the wider sanctions regime.

Businesses should maintain a strong focus on conducting periodic enhanced due diligence checks for clients and transactions involving high-risk jurisdictions. It is essential to stay alert to any changes or updates to sanctions lists and ensure due diligence is not treated as an isolated event. Firms should regularly review and update their checks - especially when transactional patterns shift, or new risks emerge - to catch potential issues early and remain compliant with evolving regulations.

Firms should establish clear procedures for both mandatory and voluntary disclosures of suspected sanctions breaches. While mandatory reporting is a legal requirement, voluntary disclosures are strongly encouraged and demonstrate a proactive approach to compliance. Early voluntary disclosure and engagement with regulators are generally viewed favourably. By reporting concerns promptly firms enable regulators to fully assess the situation. 

Multinational firms must ensure UK branches understand and comply with UK sanctions obligations, even when acting as intermediaries for wider group transactions in their corporate structures.

Firms should establish mechanisms to decline or stop payments before they are made if sanctions risks are identified. 

OTSI’s capacity to exchange information with international partners is crucial for effective global sanctions enforcement. Through cross-border collaboration, UK firms and regulators contribute to preventing sanctions evasion and support businesses operating within an international framework. 

Businesses outside financial services should learn from compliance practices, developing sanctions awareness and upskilling staff.