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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
