UK Penalizes Pharma Firm Making Payments to Sanctioned Russian Banks
The U.K.'s Office of Financial Sanctions Implementation on Sept. 10 imposed a penalty of about $205,338 against pharmaceutical company Colorcon for making unlicensed payments to sanctioned Russian banks.
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From March 23 to Dec. 2, 2022, Colorcon's representative office in Moscow made 123 payments to Alfa Bank, Promsvyazbank, Sberbank and VTB Bank, all of which have been sanctioned by OFSI. While the agency said 44 of the payments were made under a valid sanctions license that lets companies wind down their positions in Russia, the remaining payments violated the sanctions restrictions.
The payments were "predominantly to pay Moscow Office employee salaries, with a small number of payments for the company’s bookkeeping and payroll services, car and medical insurance for employees, and payments fulfilling contracts for additional services."
OFSI said "Colorcon had knowledge or reasonable cause to suspect that their actions would make funds available to designated persons." While the company made "initial and full disclosures to OFSI and cooperated fully with OFSI's investigation," the agency said there was a four-month delay between Colorcon becoming aware of the breaches and initially notifying OFSI. OFSI said the disclosure wasn't prompt, knocking down a maximum 50% penalty deduction to a 35% discount.
Colorcon didn't immediately respond to a request for comment.