37 UK-linked firms suspected of busting Russia sanctions.

Following OFSI's first Russia-related penalty [£15,000.00) last month, The BBC is now reporting the UK government is now investigating 37 UK-linked businesses for potentially breaking Russian oil sanctions - but no fines have been handed out so far.

OFSI FINE

• OFSI Issues First Monetary Penalty for Breach of Sanctions Imposed on Russia in Response to Its Invasion of Ukraine On 27 September 2024, the UK’s financial sanctions regulator, the Office of Financial Sanctions Implementation (OFSI), announced that it had issued its first monetary penalty for a breach of UK financial sanctions imposed against Russia following its invasion of Ukraine in February 2022.
• OFSI imposed a £15,000 penalty on Integral Concierge Services Limited (ICSL), a property management company, about a series of payments it made or received concerning services provided to a designated person.
• Importantly, part of the penalty was imposed on a strict liability basis.

 THE BBC SAYS 37 UK-linked firms suspected of busting Russia sanctions.

The identities of the businesses are unknown, but it is understood some are likely to be maritime insurance firms.

The Treasury said it would take action where appropriate but pointed to the complexity of the cases as a reason they take considerable time.

But Sir William Browder, a longstanding critic of Russian President Vladimir Putin, said it was an "embarrassment" that no companies investigated for potentially breaching oil sanctions had been prosecuted or fined.

The UK and other Western countries introduced financial sanctions on Russia following the invasion of Ukraine in 2022. The sanctions include a cap on the price of Russian oil, designed to ensure that oil can keep flowing without Russia making large profits.

The cap prohibits British businesses from facilitating the transportation of Russian oil sold above $60 a barrel. Sir William, who heads the Global Magnitsky Justice Campaign, told the BBC

• The UK "was one of the most lax enforcers of these types of laws".
• The UK doesn’t prosecute well, and I don’t know if that can be fixed overnight.
• "There seems to be both a resource problem and a culture problem when it comes to prosecuting people for economic crimes or sanctions evasion here."

Critics have claimed sanctions are ineffective after the latest figures showed the Russian economy was growing. Data obtained by the BBC using Freedom of Information laws shows

the Treasury has opened investigations into 52 companies with a connection to the UK suspected of breaching the price cap since December 2022.

• As of August, 37 of those investigations were live and
• 15 had concluded, but no fines had been handed out.

Louis Wilson, the head of fossil fuel investigations at the anti-corruption organisation Global Witness, said:-

• It was “quite astonishing” that no fines have yet been handed out.
• He described the oil cap as “a sort of paper tiger”, failing to crack down on rule-breaking.
• If the UK government “prevents British businesses from enabling Putin's profiteering, then I think you'll start to see others following that lead,”  

• Companies under investigation find it “pretty easy to come by” a document that gets them out of trouble.
• “What's likely is either these businesses will find the paperwork that they need to get through this process, or we'll see the UK government drop these cases quietly,”  
• The US were reluctant to make the Western sanctions regimes harder “because they're scared that if they do enforce the rules it will stop the Russian oil trade and that will send oil prices higher”.

SOURCES

1. https://www.bbc.co.uk/news/articles/c5y97k4w7llo
2. White Collar Defense and Investigations - skadden.com. https://www.skadden.com/-/media/files/publications/2024/10/ofsi-issues-first-monetary-penalty/ofsiissuesfirstmonetarypenaltyforbreachofsanctionsimposedonrussiainresponsetoitsinvasionofukraine.pdf?rev=5a185ddbe324495e87f25585891da4d8.
3. OFSI fines UK concierge services firm for violating Russia sanctions. https://bing.com/search?q=London-based+firm+Integral+Concierge+Services+Russia+sanctions+payments.
4. This is the London-based company Integral Concierge Services. https://fakti.bg/en/imoti/915646-a-company-that-provided-real-estate-services-to-a-russian-who-is-on-the-eu-sanctions-list-was-fined-20000-usd