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More than 100 companies have voluntarily disclosed that they have breached sanctions imposed against Russia, according to law firm Pinsent Masons.

Per the FT, a freedom of information request submitted by the law firm returned a list of 127 companies that have admitted to the UK government that they have breached sanctions rules imposed on Russia since its invasion of Ukraine last year.

The Office of Financial Sanctions Implementation (OFSI), a specialised agency of the Treasury, monitors and enforces the UK’s sanctions regime, including the price cap on Russian oil, responded to the request.

OFSI did not name the companies that admitted breaching sanctions law in the response to the request.

Sanctions regime

There are now 1,637 individuals and 239 on the UK’s Russia regime sanctions list.

Companies often disclose breaches of sanctions voluntarily in the hopes of receiving leniency and reducing any penalties that would be applied.

Stacy Keen, a partner at Pinsent Masons, told the FT that the sanctions imposed on Russia are not as easy to comply with as other regimes, partly due to the difficulty in working out the ultimate owner of a company.

“The challenge of dealing with Russian sanctions dwarfs the complexity of Iranian or Syrian sanctions for UK businesses.

“Given how well-hidden the ultimate ownership of some Russian-linked businesses can be, it is surprisingly easy for a business to accidentally trade with a sanctioned individual if their due diligence is lacking.”

Roger Arthey, chairman of the Institute of Export & International Trade’s Export Control Profession board, said it is good practice for companies to tell authorities that they have broken sanctions rules as soon as possible on discovery:

“This helps the regulators to appreciate the difficulties businesses have with complex regulations and the costs they incur in analysing them, and to draft regulations that are more straightforward to understand and comply with.

“We encourage regulators to work with businesses in the drafting of regulations so that exporters can comply both effectively and efficiently.”

OFSI

OSFI used its disclosure power for the first time in August to name several companies that had breached financial sanctions.

In a blog post, the agency said that it would use the powers in “moderately severe” breaches as a form of both deterrence and learning for other companies.

Nine companies, such as Wise Payments, Standard Chartered Bank and Travelex UK, were named for breaching UK compliance law, largely in relation to the Russian sanctions regime, with penalties ranging from mere disclosure to fines worth over £20m.