UK Working on 30 Criminal Trade Enforcement Probes, Most Involving Russia, Agency Says
The U.K. has seen a steady uptick in the number of new criminal investigations on sanctions and export control violations over the last three years, with most having a Russia connection, the country’s trade enforcement agency said. The agency during that time has worked to strengthen its “capabilities for detecting and responding to sanctions breaches,” including by hiring 40 more criminal investigators and devoting more funding toward gathering “intelligence” on industry’s sanctions compliance efforts.
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His Majesty's Revenue & Customs, which enforces trade controls at the U.K. border, opened 14 new criminal sanctions investigations in 2022, 22 new investigations in 2023, and 29 new investigations in 2024, the agency said in a letter to the U.K. Parliament released this week. All but four of those investigations involved a possible breach of sanctions against Russia.
HMRC said it’s currently working on 30 “live” criminal investigations on sanctions violations, 27 of which involve Russia. While none of those investigations are so far being prosecuted, the agency said they could be referred to criminal prosecutors, depending “upon the outcome of the investigation.” The agency noted that it referred a case for prosecution in October, but it’s still “awaiting a charging decision.”
HMRC released the information in response to a January request from the U.K. Parliament’s Treasury Committee. The committee said it was seeking more information about the country’s Russia sanctions enforcement, HMRC’s cooperation with the recently launched Office of Trade Sanctions Implementation (OTSI) (see 2410100010 and 2409130015), and whether HMRC would consider publishing more details about its enforcement penalties to help drive U.K. sanctions and export compliance.
The agency said it generally will only name a company that receives a penalty if the business is convicted. HMRC considered whether to name other companies “on a case-by-case-basis,” including companies that have reached settlement agreements with the government.
The U.K. publishes information about certain trade penalties, including in November when it announced four fines totaling more than $2 million against exporters for breaching the country’s export controls (see 2411040041). But it generally doesn’t publicize other details (see 2502040042).
“Where a business has taken steps to bring themselves into compliance having made an inadvertent sanctions breach, HMRC will generally not name them if doing so could have a disproportionate impact on their reputation, and ability to trade domestically and internationally,” the agency said. “This approach helps maintain an incentive for businesses to self-report and rectify non-compliance with trade sanctions through the voluntary disclosure process.”
HMRC also told Parliament that it has boosted its sanctions enforcement resources in recent years, including by recruiting 40 additional criminal investigators to “detect and enforce trade sanctions offences.” It has also hired policy advisers, legal advisers, and analysts to “develop HMRC’s and wider government’s understanding of sanctions compliance risks.” As of January, HMRC's Strategic Exports and Sanctions Enforcement team has 101 employees, 41 of which are "dedicated to sanctions enforcement work."
The agency also has received increased funding for its overseas network of “Fiscal Crime Liaison Officers,” which allows them to better gather information on “sanctions compliance for the purposes of building our understanding of risk and enforcement.” They are also working to prevent sanctions evasion in regions that are “international circumvention hot spots.”
HMRC also said it’s working with the new OTSI, the agency that will take the lead on the civil enforcement of trade sanctions for goods and services moving or being provided outside the U.K. The two agencies recently signed a memorandum of understanding to “establish an enforcement partnership,” HMRC said, under which OTSI will refer serious cases to HMRC for possible criminal investigation.
The HMRC letter also includes a breakdown of the number of voluntary disclosures, warning letters, settlements, criminal investigations, detentions, seizures, border checks and prosecutions since 2021. The agency said it issued about 5 million pounds (about $6.3 million) in penalties as part of settlements in 2024, an increase from about 2.8 million pounds (about $3.5 million) in penalties it issued in 2023.
The agency also has seen increases each year in warning letters but a fluctuation in voluntary disclosures. It received 212 disclosures in 2021, 317 in 2022 and 260 in 2023; the 2024 data isn’t yet available.