The UK’s Office of Financial Sanctions Implementation (OFSI) has fined a Russian subsidiary of Herbert Smith Freehills (HSF) £465,000 for violating Russian sanctions by making payments to sanctioned individuals.
The law firm’s Moscow office transferred just under £4 million in six separate payments to individuals subject to an asset freeze, according to OFSI. The payments, made over a seven-day period, highlighted a “pattern of failings” by the firm.
HSF Moscow ceased operations on May 31, 2022, following Russia’s full-scale invasion of Ukraine in February 2022. The violations occurred as the firm was winding down its Russian business.
Herbert Smith Freehills’ Fine Reduced for Self-Reporting
Herbert Smith Freehills voluntarily reported the sanctions breach on behalf of HSF Moscow, qualifying for a 50% reduction in the penalty. Despite this reduction, the £465,000 fine remains one of the largest ever issued by OFSI.
The Treasury-run sanctions watchdog has previously faced criticism for its slow enforcement of financial penalties following Russia’s invasion. The fine against HSF Moscow signals a tougher approach to sanction enforcement in the UK.
UK Government Reaffirms Commitment to Sanctions Enforcement
City Minister Emma Reynolds emphasized the UK’s firm stance on financial sanctions, stating:
“A just and lasting peace in Ukraine must be our priority, and UK financial sanctions continue to be essential to disrupting Russia’s war machine and putting Ukraine on the strongest footing possible.”
The UK has imposed extensive sanctions on Russian individuals and entities since the invasion, aiming to disrupt financial flows supporting Moscow’s military operations. The latest enforcement action against Herbert Smith Freehills Moscow underscores Britain’s commitment to enforcing financial restrictions on Russia.
