On 11 April 2025, the Office of Financial Sanctions Implementation (OFSI) imposed a £5,000 fine on Svarog Shipping & Trading Company Limited (“Svarog”) for breaches of UK Russia sanctions (Publication Notice).

Svarog is a UK-registered company that operates in the maritime oil shipment sector, with operations in Cyprus.

During an investigation into suspected breaches of The Russia (Sanctions) (EU Exit) Regulations 2019 (“the 2019 Russia Regulations”), OFSI learned that Svarog had transacted with a subsidiary of a UK designated entity, PJSC Sovcomflot – a Russian company operating in the energy sector.

On 26 January 2024, OFSI issued a Request for Information, asking questions relating to this investigation and indicating that a response to this request should be provided by 9 February 2024. Svarog did not provide their response by the indicated deadline and only responded after OFSI contacted the company’s auditors.

OFSI concluded that Svarog’s failure to respond by the deadline and provide a reasonable excuse for missing the deadline constitute a breach of regulation 74(1)(a) of the 2019 Russia Regulations, which state that a person commits an offence if it fails without reasonable excuse to comply with request for information within the time and the manner specified.

OFSI found a number of aggravating factors in this case, including knowledge of sanctions and compliance systems. Svarog operates in a sector that is high-risk for sanctions – maritime oil shipment, and therefore it should be more vigilant to OFSI requests for information.     

OFSI found a £5,000 penalty as reasonable and proportionate, and publishing the findings in this case is in the public interest.

The Svarog case has demonstrated the importance of compliance systems. Companies need to ensure that they have adequate policies and procedures in place, which also include effective communication between employees, training and monitoring. The sanctions legislation is complex and continues to evolve rapidly, so companies are recommended to seek legal advice if necessary. If a company receives an OFSI request for information or is unsure how to respond, or whether it can do so within a prescribed deadline, they should contact OFSI as soon as possible to seek clarification or deadline extension.

In its blog Svarog Penalty: A Lesson in Information Offences, OFSI also emphasised the importance of considering other compliance and reporting obligations, as failure to report or late reporting will also be viewed as sanctions breach.

OFSI will continue sanctions enforcement and companies are encouraged to undertake preventive measures to ensure sanctions compliance.

How Gherson can assist

The Gherson team have years of experience advising on compliance matters, including sanctions. We regularly advise clients on sanctions laws and can assist companies develop policies and systems aimed at prevention of sanctions risks.

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The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

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