Author: Dr. Angelika Hellweger
28 September 2022
2 min read
Angelika Hellweger’s most recent Rahman Ravelli Sanctions Monitor piece details the latest enforcement action by the Office of Financial Sanctions Implementation.
On 26 April 2022, OFSI (the Office of Financial Sanctions Implementation) imposed a £30,000 monetary penalty on the UK-registered company, Hong Kong International Wine and Spirits Competition Ltd (HKIWSC) for contravening regulations 3(1) and 6(1) of the Ukraine (European Union Financial Sanctions) (No.2) Regulations 2014 (the UK Regulations) and articles 2(1) and 2(2) of the Council Regulation (EU) No 269/2014 (Ukraine Misappropriation and Human Rights) (the EU Regulation).
The breaches in this case occurred between 2017 and 2020. OFSI has now published details about this enforcement case, as HKIWSC did not succeed in challenging the ministerial review in August 2022.
Although HKIWSC cooperated fully with OFSI during the investigation, a penalty reduction discount could not be applied as the company did not make a voluntary disclosure. The investigation started following a third party report.
Between 2017 and 2020, HKIWSC was said to have received three payments and 78 wine bottles from Massandra, the State Unitary Enterprise of the ‘Republic of Crimea’ Production-Agrarian Union – which is a listed entity - for entry into competitions. HKIWSC received £3,919.62 in tangible economic resources. Furthermore, the company is said to have provided publicity (which is considered an intangible economic resource) to Massandra.
In considering the case, OFSI stated that:
It added that:
While the case does not involve huge amounts, the circumstances of it and OFSI’s statements show that OFSI is starting to enforce more rigorously and is interpreting the legislation widely. The wide interpretation here is that OFSI holds the view that public relations, which are intangible, are considered as providing economic resources to a designated entity.
Angelika is a specialist in international, high-level economic crime investigations and large-scale commercial disputes. She has widely-recognised expertise in representing corporates and conglomerates in Europe, the Middle East, Africa and United States.