Herbert Smith Freehills Fined for UK Sanctions Breach by Moscow Subsidiary

British regulators have imposed a fine on global law firm Herbert Smith Freehills after its now-defunct Moscow subsidiary, HSF Moscow, breached UK sanctions on Russia. The final penalty was reduced by half due to the firm’s voluntary disclosure of the breach.

The Office of Financial Sanctions Implementation (OFSI) levied a penalty of £465,000 ($603,058.50) on HSF Moscow, which had operated as a subsidiary of UK-registered HSF London before shutting down in 2022 following Russia’s invasion of Ukraine. According to a statement from the UK government, the fine is linked to six payments made by HSF Moscow amounting to £3.9 million ($5.06 million) to JSC, PJSC Sovcombank, and PJSC Sberbank—entities subject to asset freezes under Britain’s sanctions against Russia following the invasion.

Herbert Smith Freehills, a firm with 2,400 lawyers across 24 global offices, attributed the payments to human error during the final week of winding down its Moscow operations. In a statement, the firm clarified that these transactions were unrelated to its clients, client work, or any of its other offices apart from its former Moscow branch, Herbert Smith Freehills (CIS) LLP.

“We were disappointed by the fine that has been imposed. Nonetheless, we are pleased that this matter has now been resolved,” the firm stated.

The UK government noted that the payments occurred over a span of seven days during the closure of HSF Moscow, highlighting a pattern of failings. However, the authorities acknowledged that HSF London voluntarily disclosed the breaches to OFSI, which led to a 50% reduction in the final penalty amount.

By fLEXI tEAM