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The U.K.'s Office of Financial Sanctions Implementation (OFSI)
has enforced a fine of £50,000 to TransferGo
Limited, a fintech payments company, in regard to apparent
violations of Russian sanctions. In 2014, the European Union
(including United Kingdom) imposed restrictive measures against
Russia following the annexation of Crimea, and in-turn the
destabilization of Ukraine. The economic sanctions were enforced to
affect multiple sectors of the Russian economy:
Restrictions on trade; effectively an import and export ban
that would impact the advancement of Russia's oil and gas
industry
Sanctions against individuals and entities including asset
freezes and travel restrictions
Exclusion from regular European Union meetings
Ceased lending from both the European Investment Bank (EIB) and
the European Bank for Reconstruction and Development (EBRB)
After receiving reports of a potential sanctions breach, OFSI
discovered that over a two-year period between 2018 and 2019,
TransferGo Limited issued instructions for 16 payments totaling
just over £7,500 to be made to accounts held at the Russian
National Commercial Bank (RNCB). Although regulated by the
Financial Conduct Authority (FCA), and with knowledge of the
restrictive financial measures imposed on Russia, TransferGo
Limited continued to allow payments to the Russian entity.
TransferGo Limited used the RNCB Russian bank identification code
as the recipient when issuing payments to individuals residing in
Crimea. They continued to conduct business in this way, explaining
their clients and the beneficiaries of the payments were not on any
restrictive or sanctioned list.
In their final report, OFSI concluded the fine was warranted
given TransferGo Limited lacked judgement and demonstrated poor
understanding of the European Union imposed Russian sanctions. In
addition, the fintech payments company initially withheld
information that would have led to more timely ruling. After an
independent review the full fine was upheld and OFSI's
investigation was deemed satisfactory.
TransferGo Limited committed these offences between 2018 and
2019. From January 1st, 2021, the United Kingdom (U.K.) left the
European Union meaning the U.K. no longer applied to European
sanctions regulations. Although, sanctions are now independently
implemented through U.K. regulation, OFSI reiterated it remains
committed to investigating and imposing monetary penalties, where
appropriate, for sanctions breaches prior to 31st December
2020.
