Petrofac Facilities Management Limited (PFML) paid a £569,157 compound settlement and has become the first company to be publicly named by HMRC for accepting such a penalty.
The breaches by PFML occurred in 2022 and 2023 while the company was winding down its Russian operations. The company supplied sanctioned industrial goods to individuals connected to Russia and provided technical assistance relating to those goods.
PFML self-reported the breaches to HMRC and fully cooperated with the investigation.
Naming the company marks a shift in how HMRC handles compound settlements in relation to strategic exports and sanctions.
Edwige Hill, Deputy Director in HMRC’s Fraud Investigation Service, said
Non-compliance with Russia sanctions is a serious offence and together with our international partners, the UK Government has implemented the most severe package of sanctions ever imposed on a major economy.
Naming those involved brings us into line with other enforcement partners whilst sending a clear message on the consequences of breaching sanctions rules.
Where appropriate, HMRC will now include naming as a condition when offering a compound settlement for strategic export and sanctions offences.
The new approach will improve transparency and ensure greater consistency with other UK sanctions enforcement bodies such as the Office of Financial Sanctions Implementation (OFSI).
Further information
Non-compliance with sanctions is a serious offence and those who breach them may be subject to a range of enforcement actions by HMRC, including large financial penalties or referral for criminal prosecution.
A compound settlement is the means where, through payment of a sum of money, HMRC may offer to settle alleged Sanction and Strategic Export offences committed under the Customs and Excise Management Act and the Export Control Order, out of court. This saves time and money – both for the offender and HMRC – by avoiding the need for legal proceedings. HMRC will only offer a compound settlement where it is believed there is sufficient evidence to prosecute.
When deciding if a compound settlement is appropriate and the level of the offer; HMRC’s considerations will include
- the seriousness of the alleged offence
- whether fraudulent intent can be proven
- the extent of the efforts to perpetrate the alleged offence
- the type and value of any goods involved
- the offender’s previous history
- the extent to which the offender has co-operated with any investigation
- the level of financial penalties known to have been imposed by courts for similar offences
Information on payments of compound settlements is published by the Export Control Joint Unit (ECJU) via Notices to Exporters (NTEs)
Further guidance on the voluntary disclosure regime is available on GOV.UK
You can find out more about HMRC’s approach to strategic export violations on GOV.UK.
