The UK imposed a fine of over half a million dollars on a subsidiary of Apple for violating Russia sanctions. Here are the details.

Apple subsidiary violated Russia sanctions

According to a report by Bloomberg, Apple was fined £390,000 (approximately $516,000) due to payments made to Okko LLC, an entity under sanctions in 2022.

From Bloomberg:

The Office of Financial Sanctions Implementation [OFSI] determined that Apple Distribution International Ltd. [ADI] paid £635,618 to Russia's Okko LLC, a broadcasting platform, in 2022. ADI, based in the Republic of Ireland, voluntarily reported these payments to the government agency.

At the time of the payments made in June and July 2022, Okko was subject to UK sanctions following Russia's invasion of Ukraine.

According to reports, Apple quickly notified OFSI after discovering that it had inadvertently violated Russia sanctions only after realizing that the recipient had recently become subject to sanctions.

In the official notification of the fine, OFSI stated that ADI relied on its subsidiaries to manage payments and sanctions checks, but noted that the company itself was legally responsible for the violation because it was ultimately the party that made the payments:

ADI relied on its corporate subsidiaries to functionally implement the relevant payment processes and the sanctions screening and due diligence measures discussed in this case. OFSI determined that ADI was the legal entity responsible for the violations in this case because it was the legal entity that made the payments. OFSI believes that the responsibility for ensuring compliance with sanctions legislation lies with the entity directly responsible for the violation. Therefore, while entities can delegate compliance functions to third parties, including corporate subsidiaries within a larger group structure, any mitigating or aggravating conduct demonstrated by those relevant compliance functions will be considered as the conduct of the violator.

OFSI also noted that the case was resolved through a settlement which it described as a "tool for achieving timely and effective enforcement outcomes."

As part of the settlement, ADI agreed to pay the imposed fine and waived its right to a departmental review and appeal.

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