The Dutch authorities have announced the criminal seizure of €137 million suspected of being related to breaches of the Dutch Sanctions Act by a legal entity owned or controlled by a person recently added to the EU’s list of designated persons.
Germany – investigation into purported share transfer
The travel company Tui has confirmed that the German authorities are investigating the circumstances behind the alleged transfer of a 34% stake in the company from Alexi Mordashov, now a designated person under the EU’s Russian sanctions, to his wife.
The allegation is that the transfer would be a breach of the asset freeze imposed upon Mordashov.
France – seizure of vessel alleged to be owned by sanctioned Russian bank
The French authorities have seized the cargo ship, Baltic Leader, claimed to be owned by sanctioned Russian bank Promsvyazbank.
The vessel was headed to Russian but seized in the channel.
Latvia – fines of €3.1m for breaches of Russian sanctions
Following raids in Riga and Tallinn by the Latvian Security Police, in close cooperation with the Estonian Internal Security Service (ISS), it was reported today that two individuals have been fined by the Latvian courts for breaching the EU’s Russian sanctions.
The breaches involved making funds available, through contracts involving broadcasting, to a designated person. The individuals (Oleg Solodov and Margus Merima) were each fined €25,000, and a further €3 million was confiscated.
Netherlands – 6 month custodial sentence
The Court of Appeal in the Hague has upheld the conviction of an individual on charges of breaching the EU sanctions against terrorist organisations.
Amongst other charges the individual was charged with making a financial transfer through intermediaries in Turkey and/or Syria to ISIS.
The man was sentenced to 9 months, of which 3 was conditional.
Denmark – Danish regulator criticizes Danske Bank’s KYC failings
The Danish Financial Services Authority has today published its findings in relation to Danske Bank’s internal compliance function.
The findings included:
The Danish FSA finds that there is a risk that possible breaches of sanctions may not be detected by the bank’s sanctions screening because the bank does not have procedures in place for cooperation, including the exchange of information, between the units responsible for sanctions screening, customer due diligence data and transaction monitoring.
The Danish FSA also finds that there is a risk that possible breaches of sanctions may not be detected and escalated to the bank’s team of experts in the Sanctions & Embargo Team, who investigate possible breaches of sanctions, because the employees of the units of the bank who deal with customer due diligence data and transaction monitoring to prevent breaches of sanctions receive no training.
In addition, the Danish FSA finds that there is an increased risk of employee errors and abuse in the sanctions area because of matters relating to the bank’s internal controls in the sanctions area, including the fact that the four-eyes principle is not applied in connection with the screening of customers, the organisation of controls of manual processes for escalation as well as the organisational embedding of the Sanctions and Embargo Team in Group Compliance.
UK – OFSI imposes civil penalty for sanctions breaches
Today OFSI announced it had imposed a £50,000 financial penalty on TransferGo in the latest example of the use of its civil enforcement powers.
OFSI’s penalty notice is available here.
The fine was imposed in relation to 16 transactions over nearly 2 years valued at just £7,674.77 through which funds were made available Russian National Commercial Bank, which is a designated person under the EU’s Russian sanctions.
TransferGo did not self report but did cooperate with the investigation.
OFSI’s notice makes clear that the RNCB was not the intended beneficiary of the transactions, rather the recipients of the transfers were accounts held by non-designated persons with RNCB. OFSI has made clear that as funds held in bank accounts are legally held by the banks, that these transfers all amounted to making funds available to RNCB
UK – OFSI Annual Report for 2020-2021: enforcement statistics
The UK’s OFSI has published its Annual Report for 2020-2021.
OFSI notes that it received 132 reports of potential financial sanctions breaches.
Interestingly, OFSI declined to publish the usual annual figure of the value of the reported breaches noting that “the total value of potential breaches reported during a financial year can be disproportionately affected by a small number of transactions with a large value”.
UK – OFSI Annual Report: enforcement statistics
OFSI has published its Annual Report for 2019-2020.
In its OFSI notes that it received 1490 reports of suspected sanctions breaches with a total value of £982.34 million.
OFSI also noted that breaches of Libyan sanctions were more prevalent than others.
UK: OFSI imposes £20.4m civil penalty
Today the UK’s Office of Financial Sanctions Implementation imposed a civil penalty of £20,471,809.83 on Standard Chartered Bank in the latest (and largest) use of its civil enforcement powers. The fine included a 30% reduction to take account of self-reporting and cooperation.
OFSI’s Penalty Report can be found here.
The breaches of the EU’s Russian sanctions regulation 833/2014 arose out of the provision of multiple loans to the non-EU subsidiary of a Russian bank in breach of the restrictions on certain Russian banks accessing the EU’s capital markets. In total 21 loans valued at over £97m were issued during the period after OFSI acquired its civil enforcement powers.
Initially OFSI’s fines were £31.5m, but the fines were reduced after Standard Chartered exercised its right to a ministerial review of the penalties.