US firm’s London office rebuked over Russia sanctions failings

The London office of US firm Steptoe has been formally rebuked by the Solicitors Regulation Authority (SRA) for breaching the regulator's sanctions rules relating to Russia.

It’s the latest example of regulators cracking down on compliance failures relating to Russia sanctions.

Breach

Washington-headquartered Steptoe, which has around 35 lawyers in the City, held the necessary Treasury licences to act for the two clients involved but flagged the issue itself after discovering it had broken their conditions. The mistakes were down to human error, mostly by one individual.

The firm’s non-compliance amounted to a breach of The Russia (Sanctions) (EU Exit) Regulations 2019. This, in turn, breached the SRA’s code of conduct which requires firms to "keep up to date with and follow the law and regulation".

The SRA said that the breaches were administrative in nature, and Steptoe had taken steps to tighten its compliance protocols. Still, the regulator decided a public rebuke was necessary to maintain trust in the legal sector.

Steptoe accepted the decision and agreed to pay £600 in investigation costs.

Bigger picture

The action follows previous more serious moves by UK authorities in the wake of Russia’s 2022 invasion of Ukraine. In March, Herbert Smith Freehills was hit with a £465,000 fine by the Office of Financial Sanctions Implementation (OFSI) for breaching sanctions related to Russian banks.