Ignoring Export Controls and sanctions Laws can have severe consequences, as this example of UK export control violations shows.
What happened in the field of UK Export Controls?
In accordance with The Russian (Sanctions) (EU Exit) Regulations 2019, HM Revenue and Customs (HMRC) levied a fine of one million pounds sterling on a company based in the United Kingdom in August 2023 for engaging in the illicit trade of commodities.
Why impose UK export controls fines?
As a response to Russia's invasion of Ukraine, the United Kingdom implemented unprecedented sanctions with the goals of cutting off finance for Vladimir Putin's war machine, exacting large-scale economic consequences, and expressing solidarity and support for Ukraine.
How many fines have been issued in the area of UK export controls since the Russian invasion?
To this point, the United Kingdom has imposed sanctions on approximately 1,600 individuals and businesses, including 29 banks with a total of $1 trillion in assets globally, 129 oligarchs with a combined net worth of more than $145 billion, and 96% of UK-Russia trade, which is more than £20 billion.
Consequences of non-compliance with UK Export Controls
The violation of sanctions is a serious offence that may result in hefty financial penalties or criminal prosecution. Noncompliance with sanctions may have any of these outcomes.
The United Kingdom is committed to ongoing international efforts to guarantee that sanctions are effective, that activities that help in circumvention are examined, and that appropriate action is taken where necessary.
Enforcement for UK Export Controls
In order to guarantee that fines are carried out, HMG departments (including FCDO, HMT, OFSI, HMRC, HO, and NCA) will continue to work together and engage in conversation with UK firms.
Economic Deterrence Initiative (EDI)
On March 13, the Prime Minister introduced a brand new Economic Deterrence Initiative (EDI) to address the violation of sanctions in the trade, transport and financial sectors of the United Kingdom.
An additional fifty million pounds will be made available in order to strengthen the enforcement of the sanctions regime that the United Kingdom has in place. This will be done in partnership with our significant partners, who are working to enhance capacity and competence within their own systems.
The new G7 Enforcement Coordination Mechanism, which was created in the statement released by the G7 Leaders in February, will make it possible for members of the international community to collaborate on the imposition of sanctions.