August 5, 2021

OFSI fines payment services company for Ukraine sanctions violations

The UK Office of Financial Sanctions Implementation of HM Treasury has imposed a monetary penalty of £50,000 on TransferGo Limited, a UK-based payment services provider regulated by the Financial Conduct Authority, for contravening Regulation 4 of the Ukraine (European Union Financial Sanctions) (No.2) Regulations 2014.  EU regulations were applied because the contraventions occurred prior to the UK’s withdrawal from EU sanctions implemention on December 31, 2020.

According to the penalty report, between March 2018 and December 2019, while knowing or having reasonable cause to suspect that it was in breach of UK financial sanctions legislation, TransferGo issued instructions for 16 transactions in which payments totaling £7,764.77 were made to accounts at the Russian National Commercial Bank (RNCB), resulting in funds being made available to persons designated pursuant to Council Regulation (EU) No 269/2014.  RNCB was designated pursuant to European Union regulations in July 2014, for supporting actions of the Russian government to integrate Crimea into the Russian Federation, thereby undermining the integrity of Ukraine.  According to OFSI, TransferGo’s assertions that the relevant beneficiaries were not subject to financial sanctions, and therefore the payments to RNCB were not breaches, reflects a poor understanding of financial sanctions.

Although TransferGo did not disclose the transactions to OFSI, thereby foregoing a potential discount of 50% on the penalty amount, the company cooperated fully in the investigation.  The company requested and received ministerial review by the Economic Secretary to the Treasury, who upheld both the decision to impose a monetary penalty, and the amount.  TransferGo’s request for anonymity was denied. 

Penalty report