Since the Russian invasion of Ukraine in 2014, more than 100 UK companies admitted to violating sanctions against Russia.
As of May 17, the Office of Financial Sanctions Implementation, or OFSI, recorded that 127 companies had reported sanctions violations voluntarily.
The UK government has added hundreds of people and organizations linked to Russia to the sanctions list after the February 2022 invasion. Pinsent Masons a law firm, which obtained the figures after submitting a Freedom of Information request to OFSI, reports that there are currently 1,637 people and 239 organisations on the list. Treasury, the body that oversees sanctions enforcement, didn’t name any companies in their response.
Pinsent Masons stated that companies can expect to be treated “leniently” if they report violations voluntarily to HM Revenue & Customs or the OFSI. The responses to these disclosures can range from no action to a warning, civil penalty, or criminal prosecution.
Stacy Keen is a partner with Pinsent Masons. She said that avoiding breaches can be difficult due to the opaqueness of company control.
Keen, an expert in financial crime issues, said that Russia’s integration into the global economy was more complex than for other countries under comprehensive sanctions such as Iran or Syria. She said that companies who have never had to deal before with sanctions now have to because of the UK’s close relationship with Russian individuals and entities.
The complexity of Iranian and Syrian sanctions is far greater for UK companies. It is surprising how easy it is for businesses to trade with sanctioned individuals if they fail to do their due diligence.
Keen stated that the OFSI would eventually name companies who are subject to civil penalties, and sometimes it will also identify those who have breached sanctions through its “disclosure powers”.
Wise was named in September for a “moderately serious” violation of the sanctions against Russia, but it wasn’t fined. This occurred after Wise allowed a business client to withdraw £250 cash.
The office fined Standard Chartered Bank £20.5 Million in 2020 for loans made to Russian entities in violation of EU regulations implemented in 2014 following the annexation Crimea.