City firm Herbert Smith Freehills has been fined £465,000 after breaching UK financial sanctions on Russia. It is the first time the Office of Financial Sanctions Implementation (OFSI) has brought enforcement action against a law firm for breaking Russia sanctions since the invasion of Ukraine.

HSF made a series of payments to Russian banks subject to asset freezes, according to the OFSI. It said today that HSF paid £3.9 million to Russian banks Sovcombank, Sberbank and Alfa-Bank, despite sanctions against them.

The firm said it is ‘disappointed’ the fine was imposed after self-reporting the ‘good faith errors’.

The payments took place in May 2022 over a period of seven days, as HSF wound down its Russian offices after the fallout of Russia’s invasion of Ukraine in February of that year.

It is the first time OFSI has brought enforcement action against a law firm for breaking Russia sanctions since the invasion of Ukraine.

Economic secretary to the Treasury Emma Reynolds said: ‘Our commitment to robust enforcement of UK financial sanctions is steadfast. A just and lasting peace in Ukraine must be our priority, and UK financial sanctions continue to be essential to disrupting Russia’s war machine and putting Ukraine on the strongest footing possible.’

An HSF spokeswoman said: ‘These payments were made as a result of human error, in the final week of the winding up of our former Moscow office’s operations. They do not relate to the firm’s clients or client work, or to any of the firm’s offices other than our former office in Moscow, Herbert Smith Freehills (CIS) LLP.

‘The firm self-reported these incidents to the Office of Financial Sanctions Implementation promptly and has co-operated fully throughout their investigation.

‘Given the firm’s self-reporting and co-operation, OFSI’s recognition that these payments occurred as a result of good faith errors made during our withdrawal from Russia, and the prompt recovery of the only substantial payment, we were disappointed by the fine that has been imposed.

‘Nonetheless, we are pleased that this matter has now been resolved. The firm is committed to complying in full with its obligations.’

An SRA spokesperson said: 'We have looked into this matter, but cannot take action as it is outside of our jurisdiction. We do not regulate HSF Moscow or any lawyers involved in this case.'