Enforcement
October 28, 2019

U.K. Fines Unit of Swedish Telecom Services Provider Over Syria Sanctions Violation

By Samuel Rubenfeld

The U.K. government’s Office of Financial Sanctions Implementation (OFSI) on Monday announced it had imposed a monetary penalty on a local unit of Sweden-based telecommunication services provider Telia Carrier over breaches of European sanctions regulations on Syria.

Telia Carrier UK Limited indirectly facilitated international telephone calls to SyriaTel, a Syrian mobile network provider sanctioned in the European Union and the U.S., OFSI said. Telia Carrier UK “repeatedly” made funds “indirectly available to the designated entity over an extended period of time” by facilitating the calls, OFSI said. 

“This case illustrates that ‘economic resources’ can cover a wide variety of tangible and intangible resources and can be provided directly and/or indirectly,” OFSI said. 

Neither Telia Carrier nor its parent, Telia Company, had comment on their respective websites.

The penalty, of GBP 146,341 (USD 188,241.21) imposed Sept. 9, marks OFSI’s third in 2019 for violating sanctions regulations. OFSI, a part of HM Treasury in the U.K., maintains the U.K. sanctions lists and enforces compliance. The office received 99 reports of suspected breaches with a reported value of about GBP 262 million (USD 336.9 million) from April 2018 to March 2019, according to the OFSI annual review, which was published earlier this month.

The U.K. is bound by EU sanctions, but it passed a law last year, and OFSI has been issuing guidance this year, to ensure U.K. sanctions continue uninterrupted after Brexit.

Telia Carrier UK had been hit in July with a GBP 300,000 (USD 385,950.71) penalty, but the company exercised its right to a ministerial review, which was carried out personally by the minister, OFSI said.

When requesting the review, Telia Carrier provided further clarification of the nature of the transactions that wasn’t available at the time OFSI imposed the original penalty; the resulting information “significantly reduced” the assessed value of the breaches, the office said.

Though a review will not normally be a way to introduce new material, OFSI allowed it given the significant effect it had in this case, the office said. The minister decided it was still appropriate to impose a penalty, though, reducing it by more than half, OFSI said. 

Telia Carrier UK has paid the penalty and the case is concluded, according to OFSI. 

SyriaTel was designated in 2011 by the EU and the U.S. because it was owned or controlled by Rami Makhlouf, a powerful Syrian businessman and a cousin of Syrian President Bashar al-Assad. However, recent reports indicate that Assad had ordered a series of measures against companies owned by Makhlouf, including SyriaTel, sources told Asharq Al-Awsat in late August. SyriaTel was considered Makhlouf’s “cash cow,” and the company received its mobile-phone license weeks after Assad became president, according to The Syria Report. Despite the reported changes in leadership, SyriaTel remains under EU and U.S. sanctions.

“Companies should take care to make sure they carry out appropriate financial sanctions screening or checks, and act on the results in the correct way,” OFSI said.

Analysts from the Counter-terorrism/Middle East team contributed to this report.