OFSI has published a Penalty Notice fining a UK company Markom Management Limited ("MML") £300,000 for breaches of The Ukraine (European Union Financial Sanctions) (No.2) Regulations 2014.
The fine was for issuing a payment instruction to return an overpayment of £416,590.92 to a Russian bank account belonging to a designated person.
The fine was initially set at £400,000, but was reduced through the ministerial review process.
This penalty is noteworthy for a number of reasons:
- This enforcement action dates from events in 2018. While underscoring the slowness of OFSI's enforcement steps it also reinforces the lack of a limitation period for the UK's sanctions, and the fact that the UK continues to enforce the EU sanctions that were in place before Brexit.
- The self-reporting by MML was considered insufficient to trigger a discount to the imposed penalty.
- The conduct that warranted the penalty was a person in the UK sending a payment instruction to a bank in Russia to transfer funds to another bank in Russia. This is a reminder of the broad reach of the UK's criminal jurisdiction when it comes to communications sent in or out of the jurisdiction. This penalty notice sits uneasily alongside the recent civil decision in Celestial Aviation Trading Ireland Ltd & Ors v Volga-Dnper Logistics BV [2025] EWHC 1156 (Comm).
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