OFSI Issues Financial Penalty Linked to UK Russia Sanctions Violations

10 Oct 2024, 12 mins ago

On 27 September, OFSI disclosed that on 29 August 2024, it imposed a monetary penalty of £15,000 on the UK company Integral Concierge Services Limited for breaches of regulations 11(1) and 13(1) of the Russia (Sanctions) (EU Exit) Regulations 2019.

OFSI stated that the “penalty related to 26 payments made or received by [Integral Concierge Services Limited] in 2022 and 2023 in connection with a property management services it provided” to a Designated Person who owns a residential property in the UK. Integral Concierge Services Limited also failed to report payments made to water and utilities companies under OFSI General Licences. Additionally, the company also did not make a voluntary disclosure of the breaches, resulting in the absence of  a penalty reduction discount.

This case emphasises the importance of compliance with UK Sanctions Regulations, irrespective of company’s size or nature of operations.  OFSI Report of Penalty for Integral Concierge Services Limited breach of Financial Sanctions stated that “During OFSI’s investigation, ICSL admitted that it did not believe it was necessary to seek guidance about the sanctions regime, despite the fact that its knowledge of sanctions was, by its own admission, extremely limited. As such, ICSL was unaware of its sanctions obligations beyond not making direct payments to the Designated Person and facilitating further rental payments to the Designated Person’s client account. It made no attempt to educate itself on its legal obligations, continuing to operate its business otherwise as normal in respect of the Designated Person and the Property.”

It is important for companies to understand their sanctions risks and to make every effort to address them. If necessary, companies should seek legal advice on their sanctions obligations and compliance policies and systems.

While the imposed fine may not seem substantial, it is still an indication of OFSI’s continuous efforts to investigate every sanctions violation and penalise breaches, regardless of their scale.

Gherson lawyers have significant experience in advising on sanctions compliance and can assist in developing compliance programmes and systems.

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