OFAC Fines FTI Consulting $1.05 Million Over Indirect Dealings With Sanctioned Russian Bank

The Office of Foreign Assets Control (OFAC) has reached a $1.05 million settlement with FTI Consulting over apparent violations of U.S. sanctions targeting Russia’s financial sector.

According to OFAC, between 2019 and 2021, FTI indirectly extended prohibited debt to VTB Bank, an institution subject to sectoral sanctions restrictions. The violations stemmed from consulting engagements in which FTI provided services to VTB through an intermediary law firm, while continuing to work despite invoices remaining unpaid for far longer than the permitted 14-day debt maturity period.

The case highlights a key sanctions compliance principle: it is prohibited to do indirectly what cannot be done directly. Although FTI structured the engagement through a law firm, OFAC concluded that VTB remained the ultimate beneficiary and payer of the services, creating prohibited debt exposure under Directive 1 of Russia-related sanctions regulations.

Regulators noted that FTI’s compliance teams initially identified sanctions risks and attempted to structure the engagement to mitigate exposure. However, OFAC determined that multiple warning signs were overlooked, including repeated overdue invoices, direct discussions regarding payment delays, and continued service delivery despite extended non-payment periods.

The enforcement action is particularly relevant for firms that rely on intermediaries, agents, legal representatives, or third-party contractual arrangements. OFAC emphasized that compliance assessments must focus on the economic reality of transactions rather than their formal structure, especially when sanctioned entities remain the ultimate beneficiaries.

While OFAC classified the violations as non-egregious and credited FTI for cooperation and subsequent compliance improvements, the agency increased the penalty above the base amount to reinforce broader deterrence across the consulting and professional services sectors.

For compliance teams, the takeaway is clear: sanctions risk does not disappear when a sanctioned party sits behind an intermediary. Effective compliance programs must identify ultimate beneficiaries, monitor payment arrangements, and assess whether transaction structures create indirect exposure to sanctioned entities.