Overview
On April 9, 2025, a former Russian government minister, and his brother were found guilty of breaching UK financial sanctions under the Russia (Sanctions) (EU Exit) Regulations (“Russia Regulations”). Dmitrii Ovsyannikov, a former Deputy Minister of Industry and Trade and Governor of Sevastopol, and his brother, Alexei Owsjanikow, were convicted by a jury at Southwark Crown Court on numerous counts of breaching financial sanctions and, in Mr. Ovsyannikov’s case, two related counts of money laundering for handling the proceeds of the sanctions violations. This case is significant because it is the first successful UK prosecution under the Russia Regulations. It also highlights the UK government’s commitment to enforcement of UK sanctions, including the pursuit of criminal enforcement in appropriate cases against both sanctioned individuals and their enablers.
Background
Mr. Ovsyannikov was designated by the EU and UK in 2017 in connection with his senior role in the administration of Crimea following its illegal annexation by Russia in 2014. When the UK left the EU as a result of Brexit, Mr. Ovsyannikov remained a UK designated person.
When Mr. Ovsyannikov lost his position as the Deputy Minister for Industry and Trade in Russia, he applied to have his EU sanctions lifted and sought to move to London. He acquired a British passport through his British-born father in early 2023. After arriving in the UK, Mr. Ovsyannikov applied for a UK bank account on February 6, 2023, and applied to have his UK designation revoked on February 7, 2023, after a delisting petition in the EU had been successful.
On February 8, 2023, Mr. Ovsyannikov’s wife, Ekaterina Ovsyannikov, transferred £1,000 into his new UK bank account. Around February 22, 2023, Mr. Ovsyannikov attended a Mercedes Benz showroom and attempted to buy a Mercedes Benz GLC 300 at a cost of £54,000. Over the next couple of days, Mrs. Ovsyannikov transferred a further £75,000 into her husband’s UK bank account. However, Mr. Ovsyannikov’s bank account was frozen by his UK bank upon its realizing that he was a UK designated person. Subsequently, Mr. Owsjanikow purchased the car and gave Mr. Ovsyannikov use of the vehicle.
Later in 2023, Mr. Owsjanikow made his debit card available for Mr. Ovsyannikov to use in London shops while Mr. Owsjanikow was out of the country. Additionally, in May 2024, Mr. Owsjanikow paid the private school fees of Mr. Ovsyannikov’s children on his behalf.
Decision
Mr. Ovsyannikov was found guilty of eight counts of intentionally participating in activities that knowingly would breach Russian sanctions, including receiving payments in his UK bank account and entering into an arrangement with his brother, Mr. Owsjanikow, to buy a car and insure it, for which he has been sentenced to 40 months imprisonment. Mr. Ovsyannikov was also found guilty of two counts of money laundering for the related offence of handling the proceeds of the sanctions violations, although Justice Cockerill did not award sentences for those counts. Mr. Owsjanikow was found guilty of two counts of intentionally participating in activities that knowingly would breach UK Russia sanctions in respect of the payment of Mr. Ovsyannikov’s children’s school fees. He was sentenced to 15 months imprisonment suspended for 15 months and is required to serve a curfew between 22.00 and 06.00. Mrs. Ovsyannikov was acquitted of the charges against her involving payments to her husband’s UK bank account.
While the Crown Prosecution Service sought to emphasize that Mr. Ovsyannikov was well aware of his UK designated status because he had sought to challenge his UK designation shortly after arriving in the UK, in sentencing Justice Cockerill accepted the arguments put forward by Mr. Ovsyannikov’s defence team that his offending was unsophisticated, continued for around one month and so was not of a prolonged nature, and was largely undertaken to satisfy basic needs. Consequently, the case was assessed as representing a medium level of culpability on a culpability scale from low to high. However, the involvement of Mr. Ovsyannikov’s family members in his offending was identified as an aggravating factor.
Key Takeaways
This case involved collaboration between the National Crime Agency and Crown Prosecution Service investigators and underscores the increased multi-agency focus of UK sanctions and law enforcement agencies when pursuing the investigation and enforcement of sanctions breaches. The outcome also demonstrates the UK government’s commitment to robust sanctions enforcement and a willingness to make use of the full range of available enforcement tools, including criminal prosecution in appropriate cases. Finally, the case highlights the interplay between sanctions and money laundering risks. For businesses, the case offers a timely reminder of the importance of scoping “know your customer” and due diligence checks appropriately to identify potential sanctions-related risks when a UK designated person is not a direct party to a transaction.
