UK elite law firm fined over €500,000 for Russian sanctions breaches

Yahoo

20-03-2025

Herbert Smith Freehills (HSF), a prestigious international law firm based in London, has been fined £465,000 (approximately €556,000) by the UK's Office of Financial Sanctions Implementation (OFSI) for breaching sanctions against Russia.
The firm made payments to sanctioned Russian banks following the country's invasion of Ukraine, violating the UK's strict financial measures aimed at weakening Russia's economy and military funding.
In May 2022, as HSF Moscow was winding down operations, the Russian subsidiary made six payments totalling nearly £3.93 million (€4.7 million) to three Russian banks: Alfa-Bank JSC, PJSC Sovcombank, and PJSC Sberbank.
However, these banks were already subject to an asset freeze under UK sanctions, meaning that no UK-regulated entity was allowed to provide them with funds or financial resources.
According to the OFSI, the payments showed compliance failings, insufficient due diligence, and inadequate sanctions screening during HSF Moscow's closure.
Some payments were linked to redundancy settlements for employees with accounts at the sanctioned banks, while others covered audit services and insurance products.
Related
EU agrees new sanctions on Russia, targeting LNG for the first time
Billions on ice: What to do with Russia's frozen central bank money?
'Our commitment to robust enforcement of UK financial sanctions is steadfast. A just and lasting peace in Ukraine must be our priority, and UK financial sanctions continue to be essential to disrupting Russia's war machine and putting Ukraine on the strongest footing possible,' Emma Reynolds, Economic Secretary to the Treasury, said in an official statement.
The statement also confirmed that HSF London voluntarily reported the breaches to the OFSI, meaning a 50% reduction was applied to the fine.
Companies that self-disclose sanctions violations often receive more lenient penalties, as regulators encourage transparency and cooperation.
However, the OFSI's public penalty notice on HSF Moscow stressed that the fine demonstrates the body's "firm commitment to pursuing financial sanctions breaches wherever they occur', regardless of an entity's size or reputation.
Following the penalty, HSF London formally requested a ministerial review. A senior Treasury official then upheld the OFSI's decision, confirming that the fine was fair, proportionate, and justified under UK sanctions laws.
However, the OFSI explicitly clarified that the penalty applied only to HSF Moscow and that HSF London itself was not found to be at fault. The latter remains a key international player in advising clients on financial compliance, including sanctions.