OFAC Settles with an Individual for $1,092,000 Related to Apparent Violations of Ukraine-/Russia-Related Sanctions
A natural U.S. person (“U.S. Person-1”) has agreed to pay $1,092,000 to settle potential civil liability for apparent violations of Ukraine-/Russia-related sanctions. The conduct giving rise to the apparent violations took place between 2018 and 2022 when U.S. Person-1 served as the fiduciary of the family trust of a sanctioned Russian oligarch.
The settlement amount reflects OFAC’s determination that U.S. Person-1’s apparent violations were non-egregious and not voluntarily self-disclosed. More broadly, this enforcement action highlights the unique ways in which legal structures like trusts can be used to conceal a blocked person’s interest in property. It also underscores the crucial position professional gatekeepers occupy in preventing sanctions evasion.
Description of the Apparent Violations
Initial Representation and Agreement to Serve as Fiduciary
1) This is one of several “gatekeeper”-oriented enforcement actions related to the provision of services to or related to Russian oligarchs. Compare Enforcement Release: IPI Partners, LLC (private equity firm), and Enforcement Release: Family International Realty LLC (real estate company).
2) This case is remarkable as the first civil penalty assessed to an individual identified by OFAC as an attorney. It is also the largest fine imposed on any individual pursuant to a settlement agreement (where it is assumed that payment was made). Another enforcement action close in time to this one involved the imposition of fine of over $4m, but that was the statutory maximum in a context where it is less likely that the individual fined would be able to pay (Enforcement Release - An Unnamed Individual (21)).
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