On 31st July 2025, the UK’s Office of Financial Sanctions Implementation (OFSI) imposed a £300,000 penalty on Markom Management Ltd (MML), a UK-based fiduciary management and accounting services provider, for breaching sanctions regulations. This case highlights the critical importance of sanctions compliance for businesses of all sizes and offers key lessons for legal and compliance teams.
What happened?
MML is one of a number of companies that form the Markom Group. Another company in the group is Markom Management Cyprus (MMC). MMC had been acting for a client company in relation to a sale and purchase agreement. The transaction involved funds being paid to MMC’s client by a designated person under the sanctions regulations. The accounts of both parties to the transaction were held with a bank in Moscow.
The day after the transfer of funds had taken place, MML senior management were made aware that there had been an overpayment of approximately £416,590, which they instructed to be repaid to the designated person. The sanctions breach was not noticed at the time, and was discovered several months later during an internal review which was commissioned as a result of third-party activity.
The breach was reported to OFSI in October 2018. OFSI commenced an investigation into the incident in 2021.
Enforcement and review
OFSI initially proposed a £400,000 penalty, later reduced to £300,000 following representations from MML. The company requested a ministerial review under Section 147 of the Policing and Crime Act 2017, but the penalty was upheld.
Key takeaways for compliance professionals
1. Voluntary disclosure must be timely and unprompted
Even complete disclosures may not qualify for leniency if they are externally prompted. Businesses must act swiftly, proactively and independently when identifying breaches.
2. The UK nexus matters
UK-based entities must maintain oversight of cross-border transactions. To come within OFSI’s enforcement of financial sanctions, there must be a connection to the UK, known as a UK nexus. A UK nexus will be considered on a case-by-case basis but could be created by, for example, a UK company working overseas, transactions using clearing services in the UK, or in respect of a UK company directing the overseas actions of a local subsidiary.
3. Extended investigations are possible
This case spanned more than four years, underscoring the need for robust audit trails and long-term compliance vigilance.
4. Sanctions awareness is essential across all business sizes
OFSI’s notice emphasises that firms of all sizes must understand how sanctions affect operations and implement risk-based procedures accordingly.
This case is a stark reminder that sanctions compliance is not optional. Legal and compliance teams must proactively review their policies, training programmes and escalation procedures to meet OFSI’s expectations.
