What has happened?
The Office of Financial Sanctions Implementation (OFSI) has fined the UK subsidiary of Swedish telecoms company Telia £146,341 for breaching UK sanctions laws, and specially the Syria (European Union Financial Sanctions) Regulations 2012. This represents the third penalty that OFSI has imposed this year for violations of the UK's sanctions regime.
What does this mean?
OFSI said that Telia had "indirectly facilitated" international telephone calls to SyriaTel, an entity sanctioned under the Syria sanctions regime, which resulted in it making funds and economic resources available to the designated entity over an extended period of time.
In its notice, OFSI said:
"This case illustrates that 'economic resources' can cover a wide variety of tangible and intangible resources and can be provided directly and/or indirectly. It also illustrates that companies need to be able to recognise when they are in breach of the regulations and take immediate action to stop their activity and report it to OFSI."
This penalty replaced an earlier penalty of £300,000, which OFSI had imposed in July 2019.
The penalty was reduced after Telia exercised its right to a ministerial review under section 147 of the Policing and Crime Act 2017, which was carried out by the Minister personally.
During the review, the company further clarified the nature of the transactions, which was not available to OFSI when the original penalty was imposed. This further information reduced the assessed value of the breaches from an estimated £480,000 to approximately £234,000.
"Although a ministerial review will not normally be a way of introducing new material, given the likely significant impact in this case, OFSI provided the clarification to the minister," the OFSI notice said.
The option of ministerial review is therefore worth bearing in mind by companies found to have breached the Regulations where the company disputes the value of the breaches and can provide material to back this up. However, the case does not shed any light on the meaning of "likely significant impact".
In this case, the Minister decided that a penalty was appropriate and considered that OFSI's decision to impose the £300,000 fine had been correct given the estimated value of the breach at the time of the July fine.
However, taking the further clarification into account as well as the case information in OFSI's original decision, the Minister also decided that the penalty should be reduced.
Telia did not appeal to the Upper Tribunal, as it had the option to do under the 2017 Act, and has paid the fine.
Please let us know if you have any questions on this case or whether we can help your organisations naviguate the world of regulatory sanctions.
Authored by Aline Doussin, Louise Lamb and Jamie Rogers