On 29 August 2024, following an investigation lasting over 15 months, the Office for Financial Sanctions Implementation (OFSI) imposed a monetary penalty of £15,000 against our client, Integral Concierge Services Limited, for contravention of regulations 11(1) and 13(1) of the Russia (Sanctions) (EU Exit) Regulations 2019 (the Russia Regulations).

The case involved consideration of the following novel issues:

– the treatment of payments made in breach of an asset freeze against a designated person (DP) in connection with the maintenance of a UK property that both pre- and post-dated the introduction of the strict liability regime for breaches of financial sanctions on 15 June 2022;
– the compliance responsibilities of a UK-registered micro-company with little to no legal or compliance functionality in circumstances where the company was exposed to heightened financial sanctions risks due to the nature of its client base;
– the application of OFSI’s aggravating and mitigating case factors as set out in its Enforcement and Monetary Penalties Guidance;
– the impact of non-disclosure by the company of its business relationship with the DP to its banking provider;
– the overall assessment by OFSI of the case as “serious” or “most serious”;
– the question of whether the disclosure of additional sanctions breaches amounted to a voluntary disclosure leading to a reduction in the proposed baseline penalty; and
– the company’s separate liability for its failure to comply with general licence reporting obligations in breach of regulation 67(2) of the Russia Regulations.

The penalty report was published on OFSI’s enforcement actions page on 27 September 2024.