‘A Lot of Work’ Underway to Build Out New Sanctions Enforcement Agency, UK Official Says
The U.K. is open to strengthening enforcement against both British and third-country companies that illegally divert goods to Russia, said Douglas Alexander, the U.K.’s minister for trade policy and economic security.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
Alexander, speaking this week to the U.K.’s Business and Trade Subcommittee on Economic Security, Arms and Export Controls, said he believes the U.K.’s economic security tools have so far proven “pretty effective.” But when asked whether he’s "satisfied" with U.K. enforcement, Alexander said there’s room to improve.
“Whether it is about investment security or export controls,” he said, “we are always open to the thinking and learning of this committee as to what we could or should do better.”
Alexander called the U.K.’s sanctions regime "rigorous" and said sanctions agencies are “constantly” trying to find companies that are circumventing those restrictions. Since starting in his role last year under Prime Minister Keir Starmer, the U.K. has “already acted to strengthen that regime,” he said, pointing specifically to the new Office of Trade Sanctions Implementation (see 2410100010, 2409130015 and 2502040042).
OTSI was established in October to oversee and enforce trade restrictions on controlled goods and services moving or being provided outside the U.K., but a government official in February said it “isn’t yet a finished product” (see 2502140007). Alexander made similar points and said OTSI is hoping to soon publish its first annual report about its enforcement activities.
The agency “is only nine months young, so we have a lot of work underway in the department to build up the capability of OTSI,” he said.
Alexander stressed that the U.K. government has “no public policy objection to strengthening the sanctions,” particularly those related to Russia. Asked whether firms “facilitating that kind of trade” with Russia “would face the full weight of the law,” Alexander said: “Yes, absolutely.”
The U.K.’s Revenue and Customs agency earlier this week fined a British exporter $1,160,725.67 pounds (about $1.57 million) for violating sanctions against Russia, the largest settlement ever issued by the U.K. customs agency for a Russia-related sanctions breach (see 2507080049).
Several Parliament members also asked Alexander if the U.K. would commit to strengthening sanctions against the United Arab Emirates for reportedly supplying weapons to Sudan’s Rapid Support Forces, whose senior officials have been sanctioned by both the U.K. (see 2411130040) and the U.S. (see 2505130008) for its role in Sudan's ongoing civil war. American lawmakers also have urged the U.S. government to end weapons sales to the UAE because, they said, the country is fueling the war (see 2505160004).
Alexander said the U.K. is “unaware of instances of weapons being passported through the UAE to Sudan.” He added that all U.K. military exports to the UAE must first obtain an export license, which are “judged on a case-by-case basis," and the U.K. has sanctioned nine entities linked to both the Rapid Support Forces and the group it’s fighting against, the Sudanese Armed Forces.
“We are not aware that U.K. military equipment being licensed to the UAE is being diverted to Sudan, but we will not grant a license unless the end-user provides a signed undertaking" that says “the goods will not be re-exported or otherwise resold or transferred to a destination subject to” an embargo, Alexander said. “We expect end-users to honor that commitment, and if they do not, we can suspend or revoke licenses, and we will factor that into decisions on any future licenses.”
Asked how the U.K. is helping British businesses understand their compliance obligations, Alexander pointed to a new “economic security advisory service” within the Department for Business and Trade, which the U.K. outlined in its trade strategy released last month (see 2506270011). Alexander said the service will establish a “better user interface between government and the private sector,” allowing businesses to more easily find information about U.K. economic security measures.
The service will make sure that “if you are a company that is concerned with export controls, investment security or the range of other areas covered by economic security, not only are we effective in the advice that we offer,” he said, “but you know how to access that advice.”