Herbert Smith Freehills (HSF) has been fined £465,000 by the UK government for sanctions breaches related to Russia, with payments made to banks the subject of asset freezes under British sanctions.
The fine was imposed by the Office of Financial Sanctions Implementation (OFSI) after HSF’s former Moscow office made six payments totaling £3.9 million to sanctioned Russian banks.
The payments were made to Alfa-Bank JSC, PJSC Sovcombank, and PJSC Sberbank.The transactions occurred over a seven-day period as the company was closing its Moscow operations in 2022.
OFSI attributed the breaches to a “pattern of failings,” including inadequate due diligence and sanctions screening during the “hasty closure” of HSF Moscow. Some payments were for staff redundancy settlements with Sberbank accounts, while others covered audit services and insurance products.
HSF, which employs 2,400 lawyers across 24 global offices, blamed the violations on human error during the final week of shutting down its Moscow operations.
The firm voluntarily disclosed the breaches, resulting in a 50% reduction of the penalty. HSF London agreed to pay the fine on behalf of HSF Moscow.
HSF requested a ministerial review of the fine, which was initially imposed in November 2024, but a senior Treasury official upheld OFSI’s decision. Emma Reynolds, the economic secretary to the Treasury, emphasized the UK’s commitment to enforcing financial sanctions as part of efforts to disrupt “Russia’s war machine.”
