London | Financial Times
More than a hundred British companies have admitted violating government sanctions against Russia since the invasion of Ukraine last year, according to official data.
In total, 127 companies had voluntarily disclosed their sanctions violations as of May 17, according to a request for information to the government that was obtained by the Financial Times.
By admitting violations and cooperating with investigations, companies can reduce their penalties.
The UK has imposed sanctions on more than 1,600 people and companies since the Russian hacker attack in February 2022. In response to the war, the United Kingdom put together its toughest sanctions package against a major economy, imposing a moratorium on British companies with which it deals more often than ten banks and more than a hundred oligarchs.
Stacy Keen of law firm Pinsent Masons which made the access to information request says the scale of the sanctions has been a test for the UK economy, as Russia is much more integrated into the global economy compared to other regimes like Iran and North Korea .
“The sanctions packages were felt more strongly outside of Russia than in other cases,” she says. “Russian individuals and organizations had a presence outside of Russia that members of the Iranian and Syrian regimes may not have had.”
Companies admit violations to ensure greater leniency, Keen adds. The penalties for sanctions can range from failure to take action or a warning to a civil sanction or criminal prosecution. Financial penalties are unlimited.
The Office of Financial Sanctions Implementation (OFSI) is responsible for monitoring violations. A person close to the agency said the unit “does not seek to unduly punish honest mistakes” and considers appropriate efforts and controls implemented as possible mitigating factors when assessing a violation.
Issues related to a lack of transparency, as well as Russian shareholders potentially behind shell companies, could make it difficult for British companies to ensure they have not breached sanctions.
The extent of ties between Britain and Russia in a number of sectors became clear last year when the Chelsea club was plunged into crisis after the UK announced sanctions against its then owner, Russian oligarch Roman Abramovich. The move halted sales of the Premier League team and jeopardized its sponsorship deals.
Western sanctions have frozen $300 billion (R1.4 trillion) belonging to Russia’s central bank since the invasion of Ukraine. European Union leaders last month endorsed plans to use billions of dollars in revenue from frozen Russian assets to support Ukraine. The European Commission is expected to present proposals on this issue in early December.