Sanctions enforcement: $30bn of Russians’ assets frozen or seized (and the UK levies a £15,000 fine)

On 29 June 2022, the Russian Elites, Proxies, and Oligarchs (REPO) Task Force, a multi-national group aimed at seizing or freezing the assets of Russians, issued a joint statement announcing that since its inception in the immediate aftermath of Russia’s invasion of Ukraine this year, it has:

1) blocked or frozen more than $30bn worth of sanctioned Russian’s assets;

2) immobilised $300bn worth of Russian Central Bank assets;

3) seized, frozen or detained high-value goods and luxury real estate owned, held or controlled by sanctioned Russians; and

4) restricted Russia’s access to the global financial system, hindering Russia’s efforts to sustain its invasion in Ukraine.

REPO is a co-ordinated international initiative between the United Kingdom, the United States, the European Commission, Germany, Italy, France, Japan, Australia and Canada, set up to assist in bringing down those Russians facilitating the war in Ukraine through close collaboration, including with private sector financial institutions and entities dealing with Russian assets.

REPO’s joint statement made clear that their work is “not yet complete” and that REPO members will continue to work to impose costs on Russia for its invasion of Ukraine. They describe their work as being done to “maximise the impact of sanctions on designated persons and entities while guarding against spillover that affects global commodities markets and food supplies”.

In comparison to the huge sums coming within the remit of REPO’s work, the UK’s most recent sanctions fine, of £15,000 levied in May 2022, seems insignificant. However, given that prior to this fine, OFSI had only ever imposed six fines, it is still noteworthy. Whilst attention has been on Russian sanctions in recent months, this penalty was imposed for a breach of the Syrian sanctions’ regime, the company in question having made funds available for the benefit of a designated person.

The fine imposed included a 50% reduction for the company’s voluntary disclosure of the breach. Whilst the fine demonstrates that the Office of Financial Sanctions Implementation (OFSI) does penalise breaches of sanctions legislation, it reinforces OFSI’s own recent admission that it needs to upscale and upskill, in particular with the need for a more structured whistle-blowing process for breaches to be reported.