United Kingdom – European Sanctions Enforcement

April 10, 2025April 10, 2025 by Mark Handley

United Kingdom – first criminal convictions under the UK’s Russian sanctions

It is being reported that the jury in the criminal prosecution of designated person Dmitrii Ovsiannikov, his wife Ekaterina Ovsiannikova, and his brother in law Alexei Owsjanikow have returned two guilty verdicts and one acquittal.

See our earlier posts on the progress of this case here and here.

These are the first criminal convictions obtained by the UK authorities under the UK’s Russian sanctions regime, and the first criminal conviction under any sanctions regime since 2017. It is also a rare example of the prosecution of a designated person.

Ekaterina Ovsiannikova was acquitted on four counts of circumventing sanctions arising from payments to her husband of £76,000 in 2023.

Alexei Owsjanikow was acquitted of several counts relating to access to a car, arranging car insurance and use of a bank account. He was, however, convicted of two counts of circumventing sanctions relating to the payment of £41,027 in private school fees.

Dmitrii Ovsiannikov was convicted of six of the seven counts he was charged with, all relating to breaches of the asset freeze imposed upon him by reason of his status as a designated person.

Sentencing will take place in due course, and it is to be hoped that the judge’s Sentencing Remarks are made public.

April 10, 2025April 10, 2025 by Mark Handley

United Kingdom – export control compound penalties issued totalling £3.7m

Yesterday the UK’s HMRC issued a Notice to Exporters publishing three recent compound penalties issued to exporters.

In line with HMRC policy when agreeing to a compound penalty resolution, the information provided on the offending, the offender, and the co-operation provided is limited, although in this instance it is specified that the penalties do not relate to sanctions breaches. The detail available states:

The settlements relate to unlicensed exports of military-listed goods and related activity prohibited by The Export Control Order 2008 and contrary to The Customs and Excise Management Act 1979. These do not relate to sanctions offences.

The 3 settlements agreed with UK companies were:

January 2025 – £10,900.00 was paid for export license breaches in relation to the export of military goods controlled by The Export Control Order 2008
February 2025 – £431,232.20 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008
February 2025 – £3,231,762.40 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008“.

March 21, 2025March 21, 2025 by Mark Handley

United Kingdom – OFSI fines Moscow subsidiary of UK law firm £465,000

The UK’s OFSI has published a penalty notice imposing a £465,000 fine on Herbert Smith Freehills CIS LLP (“HSF Moscow”) – a UK LLP which operated as the Moscow office of the law firm Herbert Smith Freehills (“HSF”)

The fine was reduced by half due to prompt self reporting by HSF (all the breaches had been reported by 15 July 2022) and further co-operation in the form of the conduct of an internal investigation.

The breaches of the UK’s sanctions were all done by HSF Moscow between 25 and 31 May 2022. The breaches arose from six payments made to designated persons with a total value of £3,932,392.10. The six breaches were:

a payment into a bank account held at Sberbank (a designated bank) to clear an overdraft;
Payment of three invoices valued at £3,903.76 for insurance issued by Sovcombank Life, a wholly-owned subsidiary of Sovcombank (a designated bank);
Payment of £13,216.32 as a redundancy payment to an employee’s bank account held at Sberbank; and
Payment of £3,915,232.31 into an account held by Alfa-Bank (a designated bank), although the transfer was swiftly reversed.

This case emphasizes above all the approach that OFSI takes in relation to accounts held at designated banks. In the view of OFSI payments into such accounts, albeit accounts held by non-designated persons, will amount to making funds available to a designated person.

In relation to the payment to a subsidiary of a designated person, OFSI also emphasizes the importance of appropriate due diligence to understand possible issues of ownership and control.

March 21, 2025April 3, 2025 by Mark Handley

United Kingdom – enforcement update from the OFSI annual report for 2023/24

OFSI has published its annual report for the year 2023/2024.

The report provides the following data:

2021/22 – 147 investigations opened (and 101 closed);

2022/23 – 473 investigations opened (and 74 closed); and

2023/24 – 396 investigations opened (and 242 closed).

Of the 396 investigations opened in 2023/24, 288 were as a result of self-reporting with 108 opened through pro-active investigation or other means.

Further, OFSI’s report gives a break down of which sanctions regimes the investigations relate to:

347 to Russian sanctions;
21 to Libyan sanctions;
9 to Iran sanctions; and
19 across the other regimes.

The report also gives a break down of the 242 investigations closed during the year of the report:

133 closed with a finding of no breach and sending a “No Further Action” letter;
18 closed with a finding there was a breach and sending a “Warning” letter;
1 closed with a finding of a breach and a referral to a regulator;
1 closed with an OFSI public disclosure;
61 closed without a final determination that there was a breach and sending a “No Further Action” letter; and
28 investigations closed for “Other” reasons.

March 5, 2025March 17, 2025 by Mark Handley

UK – compound penalty of £374,326.07 for unlicensed exports of dual-use goods

The UK’s HM Revenue and Customs has published a compound penalty of £374,326.07 against an unnamed UK company for “unlicensed exports of dual-use goods and failure to declare a licence to customs”.

No further details were provided as to the nature of the conduct or the basis for offering a compound penalty rather than a prosecution.

February 28, 2025February 28, 2025 by Mark Handley

United Kingdom – HMRC has opened 65 trade sanctions investigations since 2022

In a letter written from the UK’s HMRC (the body with primary responsibility for the criminal enforcement of trade sanctions) to Parliament’s Treasury Select Committee, HMRC has provided significant information on its recent enforcement efforts.

Year	Number of investigations opened
2021	0
2022	14 (all relating to Russian sanctions)
2023	22 (20 relating to Russian sanctions)
2024	29 (27 relating to Russian sanctions)

Of those 65 investigations, HMRC has confirmed that 30 remain live of which 27 relate to Russian sanctions.

The letter tabulates the six fines imposed to date for breaches of the Russian sanctions, and in relation to the largest single fine of £1,000,000 imposed in August 2023 (see our earlier post), the letter notes that this fine relates to “brokering and technical assistance” and not to an actual export.

HMRC’s letter also states that a previously published compound penalty of £1,000 from September 2023 (see our earlier post) was actually for a breach of the UK’s Iran sanctions despite being described at the time as “relating to the attempted export of Dual Use goods”.

HMRC’s letter also states that in October 2024 it referred a case for possible prosecution to the Crown Prosecution Service.

February 10, 2025February 10, 2025 by Mark Handley

United Kingdom – designated person charged with failing to disclose their assets

Further to our earlier post regarding the UK’s Charity Commission investigating Aozma Sultana in relation to possible sanctions breaches, it has now been reported (first by GIR – behind a paywall), that Aozma Sultana has been charged with sanctions offences in the UK and that she appeared in court last week.

Ms Sultana is a designated person under the UK’s anti-terrorism sanctions.

The alleged offence is one of refusing or failing to comply with a request from HM Treasury for information as to her assets and finances.

Trial is currently set for June 2025.

January 28, 2025January 28, 2025 by Mark Handley

United Kingdom – OFSI reveals 706 Russian sanctions investigations opened since February 2022

As first brought to wider attention by the Global Sanctions site, the UK’s Economic Secretary has provided a written answer on the UK Parliament’s website to the question: “how many investigations by the Office of Financial Sanctions Implementation into breaches of Russian sanctions (a) are open and (b) have been undertaken since February 2022“.

The answer stated that 388 cases have been investigated by OFSI and closed since February 2022, and that 318 investigations are currently open.

This is a total of 706 investigations opened by OFSI into potential or alleged Russian sanctions breaches in the UK since February 2022.

In that time OFSI has imposed two fines (here and here) in relation to Russian sanctions and disclosed one other breach by Wise Payments Limited (here).

This means that 385 of OFSI’s opened Russian investigations since February 2022 were closed without further action.

As of April 2023, OFSI was reporting it had 172 lives cases ongoing, indicating that there has been a significant increase since then.

January 17, 2025 by Mark Handley

United Kingdom – HMRC unaware of how many sanctions investigations it is currently conducting

Sky News in the UK has made a Freedom of Information Request to the UK’s primary trade sanctions enforcement body, His Majesty’s Revenue and Customs (HMRC), asking for the “number of cases you are currently investigating”.

See the Sky News piece here (including some comments from Mark Handley of this blog).

HMRC has responded (available here and with thanks to Sky News for providing a copy).

It has said that “the number of current investigations … is not centrally recorded. To determine how many investigations are within scope of your request would require a manual search of a significant number of records, held by different business areas“.

Sky News also asked about the identities of the entities or individuals which have received the six compound penalties for breaches of the UK’s Russian sanctions.

In line with HMRC policy this information was not disclosed because “HMRC do not consider that disclosing the company name would drive compliance, promote voluntary disclosure or be proportionate“.

While this has long been HMRC’s policy, the stance of OFSI and the new Office of Trade Sanctions Implementation is that they will each name the companies subjected to fines.

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January 17, 2025January 17, 2025 by Mark Handley

United Kingdom – National Crime Agency gives update on sanctions enforcement

As first reported by the BBC, the National Crime Agency has written to the Chair of the Treasury Committee of the House of Commons to respond to a series of questions about the NCAs sanctions enforcement efforts to date.

The letter confirms that there have been no convictions obtained under Russian sanctions, or indeed any sanctions regime since the coming into force of the Sanctions and Anti-Money Laundering Act in January 2021.

The NCA also stated that “a very small proportion” of its workload is sanctions-related, but it would not disclose how many cases had been referred to it by OFSI or any other body, or how many active investigations followed from the 5,600 sanctions-related suspicious activity reports it received in the year 2022-2023.

The letter also stated:

“the NCA’s Combatting Kleptocracy Cell (CKC) has delivered over 150 disruptions, which include: asset freezes and forfeiture, taking action against key enablers, and supporting international partners” and then gave a number of specific examples including the successful forfeiture of £780,000 obtained in July 2024.

Another example given was “The arrest of enablers in the regulated sector who support the transactions of corrupt elites“, although no further detail was provided.