Herbert Smith Freehills, the elite international regulation agency primarily based in London, has been fined by the British authorities after its former Moscow workplace made hundreds of thousands of kilos in funds to sanctioned Russian banks.
The Workplace of Monetary Sanctions Implementation (OFSI), mentioned it had imposed a penalty of £465,000 on HSF Moscow, which was a subsidiary of HSF London till its closure in 2022 after Russia’s invasion of Ukraine.
The advantageous, which was upheld after Herbert Smith requested a ministerial evaluate, pertains to six funds value a mixed £3.9m, made by HSF Moscow to Alfa-Financial institution JSC, PJSC Sovcombank and PJSC Sberbank.
The trio of banks are all topic to an asset freeze beneath Britain’s sanctions on Russia after the invasion of Ukraine, the UK authorities mentioned.
Herbert Smith Freehills, which has 2,400 attorneys in 24 workplaces world wide, blamed the funds on human error throughout the last week of its efforts to close down its Moscow operations in response to the battle.
The funds don’t relate to the corporate’s shoppers or shopper work, or to any of their workplaces aside from its former workplace in Moscow, the regulation agency mentioned in a press release.
“We had been upset by the advantageous that has been imposed. Nonetheless, we’re happy that this matter has now been resolved,” mentioned Herbert Smith, whose work contains advising shoppers on sanctions compliance.
OFSI, a division of the Treasury, mentioned the funds, unfold over a interval of seven days as the corporate wound down its Russian workplaces, had been brought on by a “sample of failings”.
It blamed insufficient due diligence and sanctions screening, amid the “hasty closure” of HSF Moscow.
A few of the funds associated to redundancy settlements for workers with Sberbank accounts, whereas others associated to charges for audit companies and insurance coverage merchandise.
HSF London voluntarily disclosed the breaches to OFSI, leading to a 50% discount to the ultimate penalty quantity. HSF London agreed to pay the sum on HSF Moscow’s behalf.
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OFSI additionally disclosed that HSF London had sought a ministerial evaluate of the advantageous, initially imposed in November 2024. A senior Treasury official upheld OFSI’s preliminary determination.
Emma Reynolds, the financial secretary to the Treasury, mentioned: “Our dedication to sturdy enforcement of UK monetary sanctions is steadfast.
“A simply and lasting peace in Ukraine have to be our precedence, and UK monetary sanctions proceed to be important to disrupting Russia’s battle machine and placing Ukraine on the strongest footing doable.”
