A law firm that advises clients on financial sanctions compliance breached financial sanctions itself, while winding down the office that would otherwise have advised on exactly this. It is one of the few published penalties against a professional-services firm rather than a bank, and the six breaches are unusually mundane — which is what makes the case useful.
What the six payments actually were
None of the six payments was a deliberate attempt to route funds to a sanctioned bank. An audit fee created a £39.71 overdraft that senior finance staff cleared by paying the designated bank holding the overdrawn account. Three payments went to a life-insurance provider that turned out to be wholly owned by a designated bank, after staff investigated its sanctioned status and concluded, wrongly, that it was clear. One employee’s final redundancy payment went to a personal account at a designated bank because the payment was not screened. The sixth concerned arrangements made as the office itself closed.
The disclosure that halved the penalty
Herbert Smith Freehills London reported the first breach — the audit-fee payment — to OFSI the day after it happened, then ran its own internal investigation and reported five further breaches five weeks later. OFSI’s guidance rewards exactly this pattern: prompt notification of what is known, followed by a voluntary investigation that surfaces more. The 50 per cent reduction it produced here — from £930,000 to £465,000 — is among the largest disclosure discounts OFSI has published a reason for.
Why this belongs among the enablers cases
The breaches happened inside a firm whose Moscow staff had local authority to approve payments without sign-off from London, during the exact weeks that firm was disengaging from Russia because of the war. A firm can be leaving a sanctioned jurisdiction in good faith and still make payments into it through processes — payroll, insurance, closing-down costs — that were never built with sanctions screening in mind. The advisory literature on professional enablers usually concerns firms that facilitate a client’s evasion; this case shows the same failure mode occurring in a firm’s own back office.