OFSI Issues First Penalty Under Russian Sanctions Regime for Providing Property Services

The Office of Financial Sanctions Implementation (OFSI) has issued its first-ever fine under the sanction framework of Russia.

Penalty is linked with a “concierge company” that offers services to wealthy people. They have been charged with a “£15,000 fine” for delivering “property management services such as rent collection, making and facilitating payments” to a sanctioned individual.

Significance of OFSI’s Voluntary Disclosure Policy

The most important takeaway for companies is to understand the relevance of the “voluntary disclosure policy” of OFSI, which was negated in this instance.

This case highlights that it is crucial for organizations or individuals to “voluntarily disclose” violations of regulation and notify OFSI about breaches.

OFSI takes into account the “disclosure under Case Factor J as to the enforcement action taken.” If charges or any penalty is established, it will be reduced by 50% from the amount of the “final monetary penalty” for an individual who provides a quick and thorough voluntary disclosure.

ICSL Fined for Breaching Russia Sanctions

According to the report titled “Penalty for Breach of Financial Sanctions by Integral Concierge Services Limited (ICSL),” the Office of Financial Sanctions Implementation (OFSI) imposed a penalty of “£15,000” on Integral Concierge Services Limited for breaching the “Russia (Sanctions) (EU Exit) Regulations 2019.”

The penalty is related to 26 payments “made or received” by ICSL worth “£15,487.3” for providing “property management services” to a sanctioned individual with whom providing services or transactions was prohibited.

The company kept on dealing with “sanctioned individuals” and offered services on behalf of a “designated person” without getting any persimmon or official license.

Read Also:

• TD Bank Agrees to Pay $3 Billion in Historic Money Laundering Settlement
• US sanctions Russian crypto platforms for money laundering ties
• US SEC Targets Elon Musk for Potential Sanctions in Twitter Probe

Another reason for the penalty was ICSL’s inability to comply with the reporting requirements established by OFSI for “payment-related utility services.” ICSL’s lack of understanding of the sanctions regime and regulations led to breaches of laws, as it did not seek guidance.

The reason for the sanction is to compel (an attempt to change an actor’s behavior) or deter (an attempt to stop an actor from certain actions) the financial activities of designated entities, which was disrupted by ICSL as it facilitated the payments.

As per the media resources of the Solicitors Regulation Authority, OFSI assessed this case as “serious” but did not classify it as “most serious” and mentioned the significance of “voluntary disclosure.”

This case highlights the importance of sanctions screening, regardless of primary or secondary sanctions and mandates firms to fully understand and follow the UK’s sanction landscape, particularly in dealing with high-risk countries such as Russia and Ukraine.

AML Watcher provides sanction screening solutions, which screen entities against globally updated sanctioned lists and 200+Sanction Regimes that cover, Economic Sanctions, Diplomatic Sanctions, Secondary Sanctions, Regional Sanctions, Screening of Vessels, Aircraft, Businesses, and Crypto Wallets and much more.