United Kingdom – European Sanctions Enforcement

July 23, 2024 by Mark Handley

UK – two law firms reported to OFSI by legal regulator

It is being reported that two law firms have been reported by the Solicitors Regulation Authority (SRA) to the UK’s OFSI.

it is alleged that the law firms were facilitating financial transactions valued at more than £300,000. It is unclear whether the conduct relates to designated persons, trade sanctions, or the UK’s prohibitions on Russian investment.

The attention on law firms chimes with the report yesterday that there has been an investigation in Germany relating to a potential breach of the EU’s prohibitions on legal advice.

July 9, 2024 by Mark Handley

UK – HMRC criminal investigation into alleged exports of perfume to Russia

In a civil judgment handed down earlier this week, it was revealed (at paragraph 63) that an individual, David Crisp, was arrested by HMRC on 10 October 2023 and electronic devices were seized.

The allegation is that companies managed by Mr Crisp were knowingly exporting perfume to Russia in breach of the UK’s sanctions.

As of the date of the judgment, HMRC had confirmed (at paragraph 69) that the criminal investigation remains ongoing but so far no charges have been made and Mr Crisp is no longer on bail.

The judgment itself is of note for the Court removing Mr Crisp as a director of the relevant companies on the basis that there was a “strong prima facie evidential basis for the allegations” of breaching the UK’s sanctions. The orders were a form of interlocutory relief as part of an unfair prejudice petition brought by another of the shareholders of the companies.

July 5, 2024 by Mark Handley

UK – National Crime Agency applies for confiscation order for £1.1m

The UK’s National Crime Agency has applied to confiscate £1.1m in frozen funds owned or controlled by Petr Aven on the basis that the funds in question are the proceeds of crime for being the proceeds of suspected breaches of the UK’s Russian sanctions.

It is being reported that the funds were first frozen by a court order in May 2022. The money is said to have been used in transactions by Ekaterina Kozina, Petr Aven’s wife, and Stephen Gater, Aven’s “representative”.

May 16, 2024May 16, 2024 by Mark Handley

United Kingdom – HMRC corrects/changes description of earlier fine to withdraw reference to Russian sanctions

Back in April we posted about a Compound Penalty imposed by HMRC on a company for breaching the UK’s Russian Sanctions Regulations.

The company was fined £1,058,781.79.

HMRC has today issued a changed Notice to Exporters about this fine. The changed description removes any reference to the UK’s Russian sanctions regulations and replaces it with:

“March 2024 – £1,058,781.79 was paid relating to the unlicensed exports of dual use goods controlled by Retained Regulation 428/2009“.

No explanation for the change is given.

May 13, 2024 by Mark Handley

United Kingdom – OFSI has ongoing oil price cap investigations

As part of its evidence to the UK Parliament HM Treasury (of which OFSI is a part) has provided the first indications that it has ongoing investigations into possible breaches of the oil price cap.

HM Treasury stated:

“OFSI takes a proactive enforcement approach and is currently undertaking a number of investigations into suspected breaches of the oil price cap, using powers under SAMLA to request information and working closely with international partners in the G7+ coalition. Although OFSI cannot discuss or comment on individual cases, OFSI is able to launch investigations based on
suspected breach reports shared with us, intelligence capabilities, and other reporting“.

HM Treasury also repeated the statistic from its Annual Report that as of April 2023 it had 172 cases under live investigation (no update covering the intervening 13 months was provided), and confirmed an earlier ministerial answer that the first fines for breaches of post-2022 Russian sanctions are expected this year.

April 25, 2024May 16, 2024 by Mark Handley

United Kingdom – HMRC issues £2.3m in compound penalties for sanctions and export controls breaches

His Majesty’s Revenue and Customs, the body empowered to enforce export controls and trade sanctions in the UK, has today published two Notices to Exporters setting out compound penalties in relation to Russian sanctions and export control violations.

The first Notice, in relation to an unnamed company, relates to a penalty of £1,058,781.79 imposed for breaches of the UK’s Russian sanctions regulation.

No information is given as to the nature of the conduct, the value of the goods, or why a criminal prosecution was not brought. There is no mention of a confiscation of the proceeds of crime.

The second Notice relates to export control violations that are not described as breaches of the UK’s sanction. Again no information is given as to the names of the companies, the nature of the violations, or an indication given as to the confiscation of the proceeds of crime.

To quote the Notice:

“The 6 settlements made by UK companies were:

- January 2024 – £12,700.00 was paid for a breach of licence conditions in relation to the export of military goods
- February 2024 – £33,822.64 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008
- February 2024 – £971,726.00 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008
- February 2024 – £139,841.85 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008 and dual use goods controlled by Retained Regulation 428/2009
- March 2024 – £92,817.40 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008
- March 2024 – £56,915.27 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008“.

April 22, 2024 by Mark Handley

European Sanctions Enforcement – milestone of over 2000 announced and active investigations reached

With the recent news that Finland has increased the number of its ongoing investigations, Europe (meaning the EU, the UK, Switzerland, etc) has reached the milestone of over 2,000 ongoing and public sanctions enforcement investigations being undertaken by regulators and prosecutors.

No doubt there are other investigations which are ongoing in the countries shown on the graph, and no doubt there are investigations ongoing in countries not shown and which remain confidential.

How many of these will be dropped due to inconclusive evidence or exculpatory evidence, and how many will lead to a conviction or fine or acquittal is impossible to say.

It is, without question, an unprecedented level of enforcement.

April 22, 2024 by Mark Handley

UK – Charity Commission investigates sanctioned person’s fundraising

The UK’s Charity Commission has issued a press release stating that it had launched a statutory investigation into the activities of Aozma Sultana who is designated under the UK’s terrorism sanctions.

The Charity Commission has confirmed that Aozma Sultana, by virtue of being a designated person, and so subject to an asset freeze, has been removed from any trustee or senior management role in the charity Gaza Now.

The Commission is also investigating the role of two companies, Aakhirah Limited and Al-Qureshi Executives is possible misappropriation of funds by the charity.

This is not the first action taken by the Charity Commission in relation to sanctioned trustee. In December 2023, it issued a press release in relation to action taken against Dr Viatcheslav Kantor who is designated under the UK’s Russian sanctions.

April 19, 2024 by Mark Handley

UK – Government Minister gives timelines for first post-2022 financial sanctions fines

The Parliamentary website has today published a letter from Minister Anne Marie Trevelyan MP to the Chair of the Foreign Relations Committee which includes a section on the current state of UK sanctions enforcement. The letter is part of a report by the Committee.

In relation to sanctions enforcement the letter indicates that the first fines for breaches of sanctions imposed since 2022 are expected this year.

The section of the letter can be quoted in full below:

“Fines for non-compliance

Secondly, regarding the number of fines that have been issued for non-compliance with our Russia sanctions regime, I can confirm that there have been 10 Monetary Penalties imposed by OFSI since it received the power to impose these in 2017, totalling £22m.

OFSI cannot pre-determine case outcomes but does expect to see the first Monetary Penalties resulting from 2022 Russia designations come to fruition in 2024. This is in line with other jurisdictions, including the US, given the time it takes to properly investigate cases.

Financial sanctions breaches are often complex and investigations proportionately long. OFSI is responsible for both investigating breaches and deciding on the appropriate outcome, including initial penalty amounts. There are several important statutory periods to allow for representations and appeals that OFSI must comply with that also impact the time between investigations commencing and penalties being made public.

Some breaches are found to be relatively minor in nature. In these cases, OFSI will not necessarily impose a penalty, as it may be more appropriate to deal with the case in a different way such as a warning letter or referring the matter to a regulator. In 2022-2023, OFSI recorded 473 suspected breaches of financial sanctions (excluding oil price cap and counter-terrorism breaches). This is a significant increase on the 147 cases recorded in 2021-2022. This increase was expected given the scale of increased Russia sanctions, and OFSI has increased its enforcement capacity in response.”

April 9, 2024 by Mark Handley

United Kingdom – charges to two further individuals added to existing prosecution

Further to our earlier post, regarding the UK’s National Crime Agency charging Dmitry Ovsyannikov with multiple counts of breaching the UK’s Russian sanctions, following a hearing in London it is now apparent that the National Crime Agency has also charged Ekaterina Ovsiannikova (the first defendant’s wife) and Alexei Owsjanikow, (the second defendant’s brother).

As per Spotlight on Corruption, a further hearing is listed for 28 June to hear application by the defendants to dismiss the charges.

The hearing, as reported by Global Investigations Review (behind a paywall), on Monday was largely procedural and dealt with issues like bail terms. The defendants have yet to enter a plea.