Markom Management Limited (MML) breached UK sanctions against Russia and was fined £300K by OFSI.

Here's a detailed summary of the OFSI's £300,000 penalty against Markom Management Limited (MML) for breaching UK sanctions against Russia.

🧾 Background

• Company Involved: Markom Management Limited (MML), a UK-registered financial services firm.
• Sanctions Breach: MML instructed a payment of £416,590.92 to a designated person under UK sanctions related to Russia’s annexation of Crimea.
• Date of Payment: 20 February 2018.
• Sanctions Framework: The breach was under the Ukraine (European Union Financial Sanctions) Regulations 2014, which implement EU Regulation 269/2014.

⚠️ Nature of the Breach

• The payment was made via another company’s bank account (Company A at Gazprombank).
• MML knew the recipient was designated, showing a disregard for sanctions compliance.
• The payment stemmed from an overpayment made by the designated person to Company A, which MML then sought to return.
• OFSI acknowledged the misunderstanding but still found MML liable due to a lack of adequate controls and compliance procedures.

💸 Penalty Details

• Initial Proposed Penalty: £400,000.
• Final Penalty Imposed: £300,000 (after representations and ministerial review).
• No Voluntary Disclosure Discount: MML’s disclosure did not qualify for a reduction.

📚 Lessons for Industry

OFSI emphasised:

• The importance of robust sanctions compliance frameworks.
• The need to promptly identify and report suspected breaches.
• The risks of making payments in haste, primarily involving complex cross-border transactions.

Here's a comparative breakdown of recent OFSI enforcement actions, including the Markom Management case, to highlight trends, severity, and regulatory focus:

• Recent OFSI Enforcement Cases (2024–2025)

🔍 Key Comparisons and Insights

• Severity: Markom’s £300,000 fine is among the higher penalties, though not the highest. HSF Moscow’s £465,000 reflects OFSI’s willingness to penalise large firms with significant compliance failures.
• Sector Focus: OFSI is targeting a diverse range of sectors, including legal, maritime, fintech, property, and charities—indicating broad enforcement scope.
• Russia Sanctions Dominance: Most recent cases are tied to Russia-related sanctions, especially post-Ukraine invasion.
• Procedural vs. Substantive Breaches:
  • Firms like Svarog and the unnamed charities were penalised for non-cooperation (e.g., failing to respond); and
  • Markom and HSF Moscow were penalised for substantive breaches—actual financial transactions involving designated persons.

📈 Enforcement Trends

• OFSI is increasingly proactive, as seen in the ICSL case.
• There's a growing emphasis on intelligence-led investigations and public transparency.
• OFSI is consulting on doubling penalties and streamlining enforcement.

References

Penalty issued for breach of Russia Sanctions - GOV.UK https://www.gov.uk/government/news/penalty-issued-for-breach-of-russia-sanctions

 Imposition of Monetary Penalty – Markom Management Ltd (MML) https://assets.publishing.service.gov.uk/media/688b92af6c7eb66caea94df3/Penalty_Publication_Notice_-_MML.pdf