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Herbert Smith Freehills Fined £465,000 for Russian Sanctions Breaches

The UK law firm was penalized for payments made to sanctioned Russian banks during the closure of its Moscow office in 2022.

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Emma Reynolds, the economic secretary to the Treasury, said the fine demonstrated the government’s commitment to enforcing sanctions

Overview

  • Herbert Smith Freehills' Moscow office made six payments totaling £3.9 million to sanctioned Russian banks Sovcombank, Sberbank, and Alfa-Bank in May 2022.
  • The breaches occurred during the final week of the firm's hasty withdrawal from Russia following its invasion of Ukraine.
  • The Office of Financial Sanctions Implementation (OFSI) imposed a fine of £465,000, reduced from £930,000 due to the firm's voluntary self-reporting and cooperation.
  • The payments, attributed to human error and inadequate due diligence, included redundancy settlements and operational expenses.
  • This marks the first enforcement action by OFSI against a law firm for sanctions violations since the Ukraine invasion sanctions were introduced.