The UK’s Financial Conduct Authority has today fined Starling Bank £28,959,426 for sanctions compliance failings.
The Final Notice states that the bank became aware in January 2023 that its screening was being done against a small sub-set of the Consolidated List of sanctions targets.
The FCA described the compliance program at Starling as “shockingly lax”.
The FCA also noted that the fine would have been £40,959,426 without Starling’s agreement to resolve the matter.
The UK’s Office of Financial Sanctions Implementation has today issued notice of a civil monetary penalty it has imposed on a company called Integral Concierge Services Limited (“ICSL”).
The penalty was for £15,000.
The fine related to 26 payments made to, or received from, a designated person under the UK’s Russian sanctions. The payments related to property management including collecting rent, paying for maintenance, and ICSL taking its own management fees. The designated person was not named.
The company did not initially self-disclose, but did then cooperate including by disclosing breaches that had not yet been identified by OFSI.
The company also breaches the reporting requirements under several general licences, but OFSO chose to not fine in relation to those breaches but rather to treat those failures as aggravating factors.
The UK’s primary export controls enforcement body, HMRC, has today issued a Notice to Exporters giving some details on two compound settlements reached with two UK companies.
The first was reached in April 2024 and the unnamed company agreed to pay £258,000 in relation to the “unlicensed transfer of dual-use goods controlled by Retained Regulation 428/2009”.
The second was reached in June 2024 and the unnamed company agreed to pay £90,853.20 in relation to the “the unlicensed exports of military goods controlled by The Export Control Order 2008”.
No other information has been made available.
It is being reported (here albeit behind a paywall), that as of April 2024 the UK’s Office of Financial Sanctions Implementation (OFSI) had twelve ongoing investigations relating to possible breaches of the oil price cap imposed as part of the UK’s sanctions against Russia.
The information comes from a Freedom of Information Act request made by the publication Trade Winds. The response is not available on OFSI’s website.
OFSI is also reported to have confirmed that 9 of the twelve investigations were discontinued in April 2024 with no further action taken.
No information was provided on the current status of the other three investigations that were live in April, or whether any further investigations have been commenced since April.
As noted in our previous post from May, at that stage HM Treasury had stated that it “a number of investigations” then ongoing into alleged oil price cap breaches.
Reuters has reported that Airbus’s most recent half-yearly financial statements include reference to an ongoing investigation by HMRC.
Under the heading “HMRC Export Control Investigation”, the financial company records: “Airbus is fully cooperating with an investigation by the Revenue and Customs Authority of the United Kingdom into possible violations of the United Kingdom’s export control rules. It is not expected that the resolution of this matter will have a material financial impact“.
No further details are provided.
It is being reported that the UK’s National Crime Agency has completed the confiscation of funds related to Petr Aven.
The sum of £750,000 was confiscated from bank accounts held in the name of Petr Aven’s wife and others.
A sum of cash initially recovered by the NCA from a residence outside London was also confiscated.
The funds were confiscated under the Proceeds of Crime Act 2002.
Updated on 1 August to reflect issuance of NCA’s press release:
The NCA has stated that the funds, totalling £783,827.34 were held for the benefit of Petr Aven although not in his name, and that the breaches of sanctions giving rise to the funds being the proceeds of crime were: “Attempts to relocate the funds, as well as transactions made after March 15 2022 by Aven’s estate manager, Stephen Gater … . These included the payment of salaries to over 20 members of Aven’s household staff, and the sale of a Bentley Bentayga worth £160,000“.
A press release from the US Department of Justice records that an individual, Saeid Haji Agha Mousaei, was arrested in the UK on 24 January 2023 pursuant to an Interpol diffusion notice.
Mr Mousaei was then subsequently extradited to the US where he faces multiple charges arising from the alleged supply of “controlled electronics with military applications, including signals equipment like oscilloscopes and spectrum analyzers, for export and re-export to Iran”.
It is alleged that false documentation was prepared which indicated that the goods were to remain in countries such as the UAE and Armenia, but the goods were all transshipped to Iran via the UAE.
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.
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.
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”.
