United Kingdom – European Sanctions Enforcement

December 20, 2024December 20, 2024 by Mark Handley

United Kingdom – three penalties imposed by HMRC for breaches of Russian trade sanctions

On 4 November 2024, HMRC published a Notice to Exporters regarding a compound penalty of £58,426.45 imposed for breaches of Russian trade sanctions.

The Notice included the line:

“Since February 2022, HMRC has issued six compound settlements against UK companies that have breached the Russia sanctions regulations for a total of £1,363,129, including one in August 2023 for £1 million“.

This struck a chord because, as captured in this blog, only three compound penalties had been publicly imposed by HMRC for breaching Russian sanctions. So a Freedom of Information request was made about the other three.

The response is here.

FOI2024_232370 Download

The response discloses details of three compound penalties (totalling c. £237,000) from August and September 2022 and April 2023. These had each been previously published, but had not previously been described as relating to Russian sanctions.

August 2022 – £1,000.00 was paid relating to the export of goods in breach of The Russia (Sanctions) (EU Exit) Regulations 2019.
- This penalty was previously described as relating to “unlicensed exports of dual-use goods”.
September 2022 – £19,689.20 was paid relating to the export of goods in breach of The Russia (Sanctions) (EU Exit) Regulations 2019.
- This penalty was previously described as relating to “unlicensed exports of dual-use goods”.
April 2023 – £217,012.50 was paid relating to the export of goods in breach of The Russia (Sanctions) (EU Exit) Regulations 2019.
- This penalty was previously described as relating to “unlicensed exports of dual use goods”.

It is unclear why these penalties were not previously described as relating to breaches of Russian sanctions.

The FOIA request also asked for the names of the individuals or companies which were the subject of the penalties; whether any had self-reported; and what (if any) confiscation of the proceeds of crime was applied. These questions were not answered.

December 17, 2024 by Mark Handley

United Kingdom – company convicted of export control violations

His Majesty’s Revenue and Customs (HMRC) has announced the conviction of the company EDM Limited on three counts of exporting controlled military goods without the appropriate licence.

The good in question were military flight simulators valued at £38,967.68.

The company was fined £89,359.80, including costs, but HMRC’s Notice does not mention whether a confiscation order was also made.

EDM Limited had been offered a civil compound penalty to resolve the matter but had not accepted the offer in time and so the case went to trial.

November 25, 2024November 25, 2024 by Mark Handley

United Kingdom – further charges against individual already facing prosecution for breaching Russian sanctions

As an addition to the existing prosecution it is being reported that the National Crime Agency has added two new charges to those against Alexei Owsjanikow. It is alleged that he paid £41,027.25 on behalf of his brother-in-law, designated person Dmitrii Ovsiannikov, towards private school fees.

The payments are said to have been made in May this year, which would be after Owsjanikow had already been charged with other sanctions offences.

The trial for this prosecution is currently scheduled for March 2025.

November 25, 2024November 25, 2024 by Mark Handley

United Kingdom – HMRC drops investigation into alleged perfume exports to Russia

Further to our earlier post about an HMRC criminal investigation into the alleged export of luxury perfume to Russia, it is now being reported by the BBC that the investigation has been dropped.

The report does not explain the rationale for discontinuing the investigation, but notes the the primary individual involved, a Mr Crisp, had been recorded on video by a private investigator who asked “How’s your Russian market”, to which the recorded response was “We’re doing really well… we ignore government edicts”.

Another director of the company compiled evidence of the alleged sanction breaches, and provided that to the authorities.

That example of self-reporting and co-operation may well explain why the company was not itself prosecuted. It is unclear why the director Mr Crisp has not been pursued. The investigation first came to light after a civil court ruled there was “strong prima facie evidential basis for the allegations” and ordered the removal of Mr Crisp from his position as director of the company.

November 21, 2024November 21, 2024 by Mark Handley

United Kingdom – CPS advising on two further criminal prosecutions

Global Investigations Review (behind a paywall) has published the results of a Freedom of Information request to the Crown Prosecution Service which reveals that the CPS has been asked to advise on a total of three cases under Russian sanctions, two of which are not otherwise in the public domain.

One of the newly-revealed relates to financial sanctions, and the other to trade sanctions.

The third is case relates to the ongoing prosecution of three individuals.

The CPS has not yet added this Freedom of Information response to its website.

November 15, 2024November 28, 2024 by Mark Handley

European sanctions enforcement: the custodial sentences

Although one of the filters on this blog is “custodial sentence”, I thought it might be helpful to collect all the examples in one place.

As such, here is the full list of custodial sentences that have been imposed across Europe for sanctions offences since 2017. Please note this excludes suspended sentences.

2017:

Netherlands – 2 years: https://blogs.duanemorris.com/europeansanctionsenforcement/2017/03/14/netherlands-two-year-sentence-for-breach-of-al-qaida-sanctions/
Netherlands – 19 years (although this sentence included numerous other offences): https://blogs.duanemorris.com/europeansanctionsenforcement/2017/04/21/netherlands-19-year-jail-term-upheld-on-appeal/
Italy – 2 years: https://blogs.duanemorris.com/europeansanctionsenforcement/2017/05/03/italy-two-year-sentence-for-arms-exports-to-libya-and-iran/
Italy – two individuals given 3 years and 8 months and 3 years and 6 months respectively: https://blogs.duanemorris.com/europeansanctionsenforcement/2017/07/13/italy-sentences-for-arms-exports-to-iran-and-libya/
Netherlands – 16 months: https://blogs.duanemorris.com/europeansanctionsenforcement/2017/09/04/netherlands-fine-and-custodial-sentence-imposed-for-breach-of-iran-sanctions/

2018:

United Kingdom – 2.5 years: https://blogs.duanemorris.com/europeansanctionsenforcement/2018/11/22/uk-three-convicted-of-exporting-military-goods-to-iran/

2019:

Belgium – 12 months: https://blogs.duanemorris.com/europeansanctionsenforcement/2019/02/07/belgium-convictions-for-breaching-syrian-sanctions/
Netherlands – two individuals given 1 month each: https://blogs.duanemorris.com/europeansanctionsenforcement/2019/02/18/netherlands-two-companies-and-three-individuals-convicted-of-iran-exports/
Netherlands – 12 months: https://blogs.duanemorris.com/europeansanctionsenforcement/2019/11/05/netherlands-conviction-for-breach-of-isis-sanctions-2/

2020:

Germany – 7 years: https://blogs.duanemorris.com/europeansanctionsenforcement/2020/01/09/germany-seven-year-sentence-for/

2021:

Germany – 3 years and 9 months: https://blogs.duanemorris.com/europeansanctionsenforcement/2021/03/04/germany-convictions-and-fines-for-russian-exports/

2022:

Netherlands – 6 months: https://blogs.duanemorris.com/europeansanctionsenforcement/2022/02/04/netherlands-6-month-custodial-sentence/
Netherlands – 1 year and six months: https://blogs.duanemorris.com/europeansanctionsenforcement/2022/06/28/netherlands-18-month-sentence-for-exports-to-iran/
Netherlands – 2 years and 6 months: https://blogs.duanemorris.com/europeansanctionsenforcement/2022/08/31/netherlands-30-month-custodial-sentence-for-breach-of-isis-sanctions/
Germany – 1 year and 7 months: https://blogs.duanemorris.com/europeansanctionsenforcement/2022/11/17/germany-conviction-for-importing-timber-from-myanmar-referred-to-cjeu/

2023:

Germany – 5 years: https://blogs.duanemorris.com/europeansanctionsenforcement/2023/08/30/germany-conviction-for-exporting-drone-parts-to-russia/
Netherlands – 1 year and 6 months: https://blogs.duanemorris.com/europeansanctionsenforcement/2023/11/01/netherlands-custodial-sentence-and-corporate-fine/

2024:

Finland – 40 days: https://blogs.duanemorris.com/europeansanctionsenforcement/2024/02/14/finland-conviction-of-russian-national-for-breach-of-the-eu-travel-ban/
Netherlands – 4 months: https://blogs.duanemorris.com/europeansanctionsenforcement/2024/04/19/netherlands-four-month-prison-sentence-for-breach-of-isis-sanctions/
Germany – 6 years and 9 months: https://blogs.duanemorris.com/europeansanctionsenforcement/2024/07/18/germany-two-individuals-convicted-of-electronics-exports-to-russia/
Netherlands – 4 years: https://blogs.duanemorris.com/europeansanctionsenforcement/2024/09/12/netherlands-conviction-for-breach-of-isis-sanctions-upheld-by-court-of-appeal/
Netherlands – 2 years and 8 months: https://blogs.duanemorris.com/europeansanctionsenforcement/2024/10/07/netherlands-two-years-and-eight-months-sentence-for-exporting-sanctioned-goods-to-russian-airlines/
Germany – 7 years: https://blogs.duanemorris.com/europeansanctionsenforcement/2024/11/08/germany-seven-year-sentence-for-exports-of-military-and-dual-use-goods-to-russia-and-confiscation-of-profits/
Netherlands – 1 year and 3 months: https://blogs.duanemorris.com/europeansanctionsenforcement/2024/11/11/netherlands-conviction-and-confiscation-for-exporting-sanctioned-goods-to-russian-companies/

Overall the figures are dominated by the Netherlands and Germany with approximately 68 of the 80 years of sentences between them. Indeed, as the graph below demonstrates, other than Finland’s 40-day sentence for breaching a travel ban, the Netherlands and Germany are the only European countries to have sent someone to prison for sanctions offences since 2019.

November 8, 2024November 8, 2024 by Mark Handley

United Kingdom – revised (and increased) figures for the number of OFSI’s oil price cap investigations: 60 to date

As of 27 September 2024, the position as regards OFSI’s investigations into alleged breaches of the UK’s oil price cap was as follows (covering the period from 5 December 2022 to 21 August 2024:

total number of investigations commenced: 60
total number of investigations commenced where the alleged suspect is a UK person or company: 52
total number of investigations which remain open: 42
total number of investigations which remain open where the alleged suspect is a UK person or company: 37

These figures revise those we published last month which were based on the BBC’s reporting of the results of a Freedom of Information request it had made to OFSI.

After obtaining a copy of what was released to the BBC by making our own Freedom of Information request we have been able to revise the figures. The BBC did not include in its figures the investigations into non-UK persons potentially breaching the UK’s oil price cap.

What the complete figures reveal is that a further 8 investigations have been commenced into non-UK persons suspected of breaching the oil price cap, of which 5 remain ongoing.

A copy of HM Treasury’s response to our asking for the response provided to the BBC is here.

FOI2024-15950 – Copy of FOI release redacted Download

November 4, 2024November 4, 2024 by Mark Handley

United Kingdom – 9 law firms referred for investigation for possible sanctions breaches

The Solicitors Regulation Authority for England and Wales has, in its Annual Report for Money Laundering covering 2023/2024, has stated that it has required 9 law firms to report themselves to the Office of Financial Sanctions Implementation.

In eight of these instances the breach was a breach of a licence condition. It is unclear whether these were specific licences or a General Licence. The breaches are said to have varied between late or no reporting, and taking payments not actually covered by the licence in question.

While many have related to the UK’s Russian sanctions no information is given as to the identity of the sanctions regime(s) in question.

November 4, 2024November 4, 2024 by Mark Handley

United Kingdom – HMRC compound penalties for Russian sanctions and export control violations totaling £1.9m

The UK’s HMRC has issued several “Notices to Exporters” with updates as to recent enforcement activity.

In one Notice, HMRC states that is has agreed three compound penalties with different entities:

“August 2024 – £402,417.75 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008
August 2024 – £37,743.34 was paid relating to the unlicensed exports of dual-use goods controlled by Retained Regulation 428/2009
September 2024 – £1,480,785.44 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008″

As ever with such penalties the nature of the offending is not given, the identity of the offender is not given, and no indication is given as to whether or not the fine includes a confiscation element for the proceeds of the crimes.

In a second Notice, HMRC describes the compound penalty:

“August 2024 – £58,426.45 was paid relating to the export of goods in breach of The Russia (Sanctions) (EU Exit) Regulations 2019”.

Again, no other details or information is provided, although HMRC notes that this is its 6th compound penalty in relation to Russian sanctions totaling £1,363,129.

October 11, 2024October 11, 2024 by Mark Handley

United Kingdom – 37 ongoing oil price cap investigations

The BBC is reporting the results of a Freedom of Information Act request it has made to OFSI.

The response itself is not currently on the website of either OFSI or HM Treasury.

The BBC is reporting the following statistics:

52 investigations opened since December 2022
15 of those have been concluded with no further action taken; and
37 of the investigations are ongoing.

As per our earlier post, in an earlier Freedom of Information response OFSI confirmed that as of April 2024 it had started 12 investigations of which 9 had been discontinued without action taken.

As such 40 new oil price cap investigations have been started since April 2024.

Since April six investigations have been concluded.