GoKawiilThe UK has fined an Apple subsidiary more than half a million dollars for breaching Russia sanctions, following the invasion of Ukraine. Here are the details.
Apple subsidiary breached Russia sanctions
As reported by Bloomberg, Apple got slapped with a £390,000 (roughly $516,000) fine after UK regulators found that it made payments in 2022 to Okko LLC, which was owned by a sanctioned entity at the time.
From Bloomberg:
The Office of Financial Sanctions Implementation [OFSI] found that in 2022 Apple Distribution International Ltd. [ADI] paid £635,618 to Russian streaming platform Okko LLC. Republic of Ireland-based ADI voluntarily disclosed the payments, that were made via UK banks, to the government agency. At the time both payments were executed in June and July 2022 Okko was subject to UK sanctions following Russia’s invasion of Ukraine.
According to the report, Apple alerted the OFSI promptly after discovering that it had unintentionally breached Russian sanctions, after realizing the recipient had only recently become subject to sanctions.
In the official notice of the penalty, the OFSI said that while ADI relied on affiliates to handle payments and sanctions checks, the company itself remains legally responsible for the breach, since it ultimately made the payments:
ADI relied on their corporate affiliates to functionally implement relevant payment processes and the sanctions screening and due diligence measures discussed in this case. OFSI determined that ADI is the legal entity responsible for the breaches in this case, as it is the legal entity that instructed made (sic) the payments that were in breach of the Russia Regulations. OFSI considers that the responsibility of ensuring compliance with sanctions legislation rests with the entity directly responsible for the breach. Therefore, whilst entities may delegate compliance functions to third parties, including corporate affiliates in a larger group structure, both mitigating or aggravating conduct demonstrated by those relevant compliance functions will be assessed as the conduct of the breacher.
OFSI also noted that the case was resolved through a settlement, which it describes as “a means to achieve timely and efficient enforcement outcomes.”
As part of the settlement, ADI agreed to pay the penalty as imposed, and waive its rights to a ministerial review and appeal.
... continue reading