Law Firm Faces Fine for Sanctions Breach

British regulators fined Herbert Smith Freehills after its Moscow subsidiary violated UK sanctions on Russia. The penalty was halved due to voluntary disclosure. The infraction involved six payments worth millions to sanctioned banks and was attributed to human error during the subsidiary's closure.

British regulators have fined the global law firm Herbert Smith Freehills after its now-closed Moscow subsidiary breached UK sanctions on Russia. The British government's Office of Financial Sanctions Implementation (OFSI) imposed a fine of £465,000 ($603,058.50) on the now-defunct HSF Moscow for making unauthorized payments.

The fines relate to six payments amounting to £3.9 million ($5.06 million) directed towards JSC, PJSC Sovcombank, and PJSC Sberbank—banks that were under a British asset freeze due to Russia's invasion of Ukraine. This breach, described as a result of human error by the law firm, occurred during the final week of closing its Moscow office operations.

Herbert Smith Freehills, with 2,400 lawyers spread across 24 global offices, noted that the payments were not connected to its clients or any other offices. While disappointed by the fine, the firm expressed relief that the matter is now settled. A voluntary disclosure of the breach to OFSI led to a 50% reduction in the penalty amount.

(With inputs from agencies.)