OFSI fines company for employee flight sanctions breach

OFSI has updated its table of monetary penalties for sanctions breaches. The table now reflects a fine on Tracerco Limited, a company operating in the energy sector, which has been fined £15,000 for making funds available to a designated person under the Syria regime. Tracerco, although based in the UAE, is a UK registered company, and is a subsidiary of Johnson Matthey.

The payments in question related to 2 payments, totalling nearly £3,000, made to Syrian Arab Airlines for an employee to take flights home during 2017 and 2018. The airline has been designated since mid-2012 as a public company controlled by the Syrian regime.  Tracerco booked the flights through an agency and then refunded the agency the costs.  As a result, it made funds available for the benefit of a designated person.

The company made a voluntary disclosure and, as a result, the amount of the fine that would otherwise have been imposed was reduced by 50%. The report related to 4 payments, but 2 of them, although in breach of sanctions, had been made before the date OFSI’s fining power took effect. OFSI imposed the fine in relation to the other 2 payments because it was satisfied, on the balance of probabilities, that the company either knew or had reasonable cause to suspect it was in breach of the relevant sanctions. It reached this conclusion on the basis that the company was operating in the region so it was reasonable to assume it would be aware of the political situation and the importance of the sanctions regimes, that it held relevant information at the relevant time and that Johnson Matthey had in place a group compliance function that would have applied to the company. The fine was deemed appropriate even though the breach was indirect, not deliberate and was of a low value.

Emma Radmore