STORY
An energy services firm has paid more than £500,000 to HM Revenue and Customs after breaching Russia sanctions regulations. Petrofac Facilities Management Limited paid a £569,157 compound settlement and has become the first company to be publicly named by HMRC after accepting such a penalty. The breaches took place in 2022 and 2023 while the company was winding down its Russian operations.
HMRC said the company supplied sanctioned industrial goods to individuals connected to Russia and provided technical assistance relating to those goods. Petrofac Facilities Management Limited self-reported the breaches and fully cooperated with the investigation.
The decision to name the company marks a change in HMRC’s approach to compound settlements for strategic export and sanctions offences. The department said naming companies in appropriate cases would improve transparency and bring its approach more closely into line with other UK sanctions enforcement bodies.
Edwige Hill, Deputy Director in HMRC’s Fraud Investigation Service, said non-compliance with Russia sanctions was a serious offence. She said the Government, together with international partners, had implemented the most severe package of sanctions ever imposed on a major economy, and that naming those involved sent a clear message about the consequences of breaching sanctions rules.
HMRC said it may now include public naming as a condition when offering compound settlements for strategic export and sanctions offences. The department said the approach would support consistency with bodies such as the Office of Financial Sanctions Implementation.
A compound settlement allows HMRC to settle alleged sanctions and strategic export offences out of court through the payment of money. HMRC said such settlements are offered only where it believes there is sufficient evidence to prosecute.
The case underlines the continuing enforcement risks for companies connected to Russian operations, even where firms are in the process of withdrawing from the market. HMRC said businesses breaching sanctions may face large financial penalties or referral for criminal prosecution.