On 8 May 2025, the United Kingdom's Office of Financial Sanctions Implementation (OFSI) of HM Treasury published a penalty notice regarding a breach of financial sanctions by a UK registered company—Svarog Shipping & Trading Company Limited (Svarog). OFSI imposed a monetary penalty of £5,000 on Svarog for failing, without reasonable excuse, to respond to a Request for Information (RFI) issued by OFSI.
Request for Information
OFSI has statutory powers to request documents and information for certain purposes, including establishing whether financial sanctions may have been breached or monitoring compliance with certain financial sanctions regulations or licences. OFSI will specify the legislative basis for the request and the time period within which the information should be provided (if no period is specified, the information must be provided within a reasonable time). Failure to comply with an RFI is a criminal offence which can lead to prosecution or a monetary penalty.
OFSI issued an RFI to Svarog on 26 January 2024 pursuant to OFSI's statutory powers under Regulation 72 of The Russia (Sanctions) (EU Exit) Regulations 2019 (Russia Regulations). OFSI directed that a response was required by 9 February 2024. Despite OFSI sending a number of reminders, Svarog did not respond by the deadline. Svarog only responded to the RFI once OFSI contacted Svarog's auditors. OFSI concluded that Svarog had failed to respond to OFSI's RFI and, in the absence of a reasonable excuse, had breached Regulation 74(1)(a) of the Russia Regulations. OFSI imposed a monetary penalty of £5,000 for the breach.
Key Compliance Lessons
This case emphasises the importance of timely and accurate responses to RFIs and highlights a number of key compliance lessons, which are summarised below.
Respond Promptly to RFIs
- Do not ignore the request. Failing to respond to an RFI can act as an aggravating factor in OFSI's overall assessment of the severity of the breach.
- Seek clarification if the request seems unclear or the deadline is challenging to adhere to.
- If you believe you have missed a statutory deadline but you have a reasonable excuse, you should provide that excuse proactively for OFSI to consider, accompanied by a full explanation of the circumstances.
Recipients of RFIs should be aware of the importance of responding promptly, failing which can significantly impede OFSI's ability and effectiveness to assess compliance, enforce financial sanctions and maintain compliance with the sanction's regimes.
Understand the Legal Basis
- Determine the statutory basis of OFSI's RFI. If you are unsure, seek advice from sanctions or regulatory legal teams.
Engage Proactively and Candidly With OFSI When It Comes to RFIs
- Be aware of any time limits specified in the RFI.
- Provide accurate information to OFSI, ensuring it is truthful and accurate.
- Engage with OFSI's published guidance and seek professional advice on sanctions obligations if necessary.
Have Effective Communication and Monitoring Systems in Place
- Keep detailed records of compliance procedures, risk assessments and responses to the RFI.
- Demonstrate awareness of sanction compliance duties, including record keeping.
- Appoint responsible personnel, monitoring and maintaining up-to-date contact information to ensure effective communication with OFSI RFIs.
OFSI expects firms to have effective communication and monitoring systems in place so that firms can promptly identify and respond to any RFI they might receive from OFSI.
Plan for Follow Up
Be prepared for follow-up queries or interviews. OFSI may ask for clarification, more documents or meetings after the initial response.
Consider Other Compliance and Reporting Obligations
Whilst the penalty in this case related to the failure to respond to an RFI without a reasonable excuse, other types of failures to provide information can also constitute breaches leading to penalties. For example:
- Non-compliance with reporting obligations, including both failure to report and late reporting without reasonable excuse.
- Incomplete or otherwise non-compliant reporting on specific and general licences, reporting requirements on licences and failures to report frozen assets.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
