The UK’s HMRC has published a Notice to Exporters reporting on a compound penalty agreed with an unnamed UK exporter.
The penalty was £620,515.04. The conduct giving rise to the penalty is described as “unlicensed exports of military goods controlled by the Export Control Order 2008”.
No other information is provided.
The National Crime Agency has issued a press release relating to Operation Stabilise, which is targetted a criminal money laundering network that was also used to aid the circumvention of sanctions by Russia.
The NCA states that 45 money launderers have been arrested in the UK, and £25m seized in the UK, with international partners seizing $24m and €2.6m and arresting another 83 people.
The NCA notes the alleged involvement of networks called Smart and TGR and that a company linked to TGR’s head had purchased a 75% stake in a previously state-owned Kyrgyzstan bank – Keremet Bank – which was then used as part of the evasion/circumvention network.
The NCA reports a number of convictions for money laundering offences of individuals involved in the networks, and that the head of the Smart network is currently in custody in France.
The operation involved cooperation with the DEA, and FBI in the US, the Direction Centrale de la Police Judiciaire in France, the Jersey Police, Scottish Police, Finland’s National Bureau of Investigation, the Dutch National Police and Spanish law enforcement.
As first reported in Global Investigations Review (here, behind a paywall), the UK’s Crown Prosecution Service has charged Hauser & Wirth (a Swiss company) that operates an art gallery in London, and logistics company Artay Rachweger Solomons each with a count of making a luxury good (i.e. a painting) available to a person connected with Russia in breach of the UK’s sanctions.
The person connected with Russia has not yet been named.
At a court hearing on 12 November, Artay Rauchwerger Solomons indicated that it intended to plead not guilty. Hauser & Wirth gave no indication.
OFSO has published its Annual Report for 2024-2025.
This includes the following figures:
The UK’s Office of Financial Sanctions Implementation has today issued a Penalty Notice against Colorcon Limited, in relation to its Moscow branch office making 79 unlicensed payments to the company’s employees and suppliers who had accounts with designated Russian banks.
The payments were made between 23 March and 2 December 2022. The company self-reported to OFSI on 21 April 2023, but OFSI’s Notice states that the four month delay in reporting meant that the reporting was not “prompt”.
After assessing a range of aggravating and mitigating factors OFSI determined that the appropriate penalty should be £235,000 to which it applied a 35% discount for reporting (down from a 50% discount available for “prompt” reporting).
The Notice also points out that further payments were made while a “wind-down” general licence was in place, but that the reporting requirements under this general licence were not complied with. No fine was issued for this breach.
The Office of Financial Sanctions Implementation (“OFSI”) has today issued a Disclosure Notice against Vanquis Bank Limited.
Vanquis failed to react quickly enough to the designation of one of its customers under the UK’s anti-terrorism sanctions permitting a withdrawal (of £200) a day after the designation, and a purchase (of £8.99) five days after designation.
OFSI had written to Vanquis in advance of the designation to warn it that an unnamed customer of the bank was about to the designated. A day after the designation the Bank had flagged the possible match with a customer, but it took 8 days to confirm the match.
Just 5 days after the match was confirmed Vanquis reported the breach to OFSI.
In the overall circumstances, including the low value of the breaches, OFS declined to impose a fine.
It is worth noting that OFSI describes the breaches as VBL itself “made funds available to a designated person”, rather than facilitating or some other categorisation.
As part of the just-published UK’s Economic Crime Plan 2: outcomes progress report, the UK government has included the following data on the enforcement of financial sanctions:
“396 recorded cases of financial sanctions breaches in the financial year ending 2024, a 16% decrease on the previous year, but there were 242 closed cases – more than tripling the number of closed cases from the previous year“.
If the UK had identified 396 actual breaches of sanctions, this would beg the question of why there has been so little enforcement. There is, however, reason to question the data in this announcement.
In OFSI’s latest annual report (see our earlier post) OFSI stated:
“OFSI progressed a substantial number of investigations during 2023-24, recording 396 cases and closing 242, more than tripling the number of closed cases from the previous year“.
OFSI’s report is the source of the figures of 396 and 242. It would seem, therefore, that the figure of 396 relates not to identified breaches of sanctions, but to the number of financial sanctions investigations OFSI conducted during 2023-24.
Further to our earlier post, sentence has been passed in relation to the conviction of Aozma Sultana for refusing the provide financial information to OFSI despite repeated requests. The judge noted that the information had still not been provided.
The judge stated that the starting point for such an offence should be a custodial sentence of 15 weeks. Evidence was presented, however, that Aozma Sultana was the primary care provider for her 38-year-old wheelchair-bound brother, who suffers from cerebral palsy.
On that basis the judge sentenced to Aozma Sultana to 10 weeks’ imprisonment, suspended for 12 months. The court also ordered Sultana to complete 50 hours of unpaid work and 25 days of rehabilitation.
The Guernsey Financial Services Commission has issued a release regarding the imposition of several fines and the revocation of regulatory authorisations for a firm and an individual.
The firm ITI Trade Ltd was fined £175,000, and Mr Alexi Filatov was personally fined £35,000.
An order has been issued preventing Mr Filatov from holding a regulated position for 2 years and 10 months.
ITI Trade Ltd agreed to surrender its licence.
The compliance failings were first identified by the Commission in 2019, and the firm undertook (or purported to undertake) various remediation programmes (the results of which were doctored for the purpose of submissions to the Commission), before the Royal Court appointed Administration Managers over the firm in July 2022.
The failings relate to a lack of sanctions and AML compliance, due diligence and screening with the Guernsey entity “used to appear to provide investment services from Guernsey, when in reality much of the business was conducted in Russia”.
OFSI has published a Penalty Notice fining a UK company Markom Management Limited (“MML”) £300,000 for breaches of The Ukraine (European Union Financial Sanctions) (No.2) Regulations 2014.
The fine was for issuing a payment instruction to return an overpayment of £416,590.92 to a Russian bank account belonging to a designated person.
The fine was initially set at £400,000, but was reduced through the ministerial review process.
This penalty is noteworthy for a number of reasons:
