A fundamental enforcement crisis has emerged within international sanctions regimes, where major professional services firms continue facilitating evasion networks through sophisticated legal structures whilst small and medium enterprises face devastating penalties for minor compliance failures. This disparity reveals how current enforcement approaches prioritise politically visible prosecutions over systematic dismantling of the professional infrastructure that enables sanctions circumvention.
Major law firms escape accountability despite widespread violations
Professional services firms demonstrate remarkable immunity from meaningful sanctions enforcement despite their central role in facilitating evasion networks. According to Global Investigations Review, since the UK’s autonomous sanctions regime launched in 2021, enforcement agencies have “launched over 100 investigations into law firms but publicly punished just one.”
This enforcement gap becomes stark when examining the Herbert Smith Freehills case, where OFSI imposed a £465,000 penalty for breaches involving £3,932,392.10 in payments to sanctioned Russian banks. As reported by OFSI, these payments demonstrated “a pattern of failings,” yet this represents the sole successful prosecution among dozens of ongoing investigations.
The minimal penalty relative to the breach value illustrates how enforcement treats professional services violations as regulatory infractions rather than serious facilitation of sanctions evasion. Such lenient treatment ensures that Russian sanctions are not working as comprehensive tools for preventing professional facilitation of restricted activities.
Small business enforcement reveals resource misallocation
Enforcement agencies demonstrate greater success prosecuting small businesses that lack sophisticated legal representation than addressing complex professional services networks. This selective enforcement pattern reflects resource constraints that force agencies to pursue cases with lower complexity and higher conviction probability rather than targeting systematic evasion infrastructure.
SMEs face comprehensive asset freezes, business closures, and criminal penalties for compliance failures that often result from inadequate understanding of complex regulatory requirements rather than deliberate evasion attempts. The contrast between professional services treatment and SME penalties reveals how why sanctions on Russia fail to address sophisticated evasion whilst devastating businesses with minimal evasion capabilities.
Resource limitations ensure that enforcement agencies pursue visible individual prosecutions rather than systematic investigations of professional networks that require extensive international coordination and complex legal proceedings. This approach guarantees that professional facilitation structures continue operating whilst creating devastating impacts for smaller businesses caught in compliance failures.
Are Russian sanctions working when evasion networks operate openly
The effectiveness of current Russian sanctions becomes questionable when examining how sophisticated evasion networks continue operating through professional services firms that face minimal enforcement pressure. The John Ormerod case illustrates professional facilitation structures that operated for months before facing sanctions, and only after extensive media investigation rather than proactive enforcement detection.
As detailed by Splash247, Ormerod established “special-purpose companies in the Marshall Islands” whilst “Lukoil’s Dubai-based Eiger Shipping provided the funding by making advance payments to charter the ships.” Such operations require extensive professional services support that continues functioning despite sanctions restrictions.
Meanwhile, shipbroker Braemar, which “facilitated at least nine of the transactions,” faced no comparable sanctions despite its central role in the vessel acquisition programme. This selective enforcement demonstrates how professional services firms avoid accountability whilst individual operators face comprehensive sanctions for participating in networks that professional firms enable.
Economic resilience demonstrates enforcement failure
Russian economic performance during comprehensive sanctions periods reveals the ineffectiveness of current enforcement approaches that fail to address professional facilitation networks. According to The Times, Russia’s economy has shown “remarkable resilience, growing by approximately 3.6% in 2023 with projections of another 2.6% growth in 2024.”
This economic resilience occurs whilst professional services networks continue enabling sophisticated evasion operations that maintain Russian access to international financial systems. The impact of sanctions on Russia thus becomes diluted because enforcement focuses on symbolic prosecutions rather than comprehensive disruption of professional facilitation infrastructure.
The disconnect between comprehensive sanctions regimes and continued Russian economic growth demonstrates how enforcement failures enable systematic evasion whilst creating devastating impacts for individuals and small businesses caught in compliance failures. Such outcomes suggest fundamental problems with enforcement priorities and resource allocation.
EU sanctions on Russia create additional enforcement challenges
EU sanctions frameworks compound enforcement difficulties through their impact on international legal obligations that professional services firms exploit to avoid accountability. Analysis by Valérie Hanoun in Valeurs Actuelles warns that EU approaches to blocking investment arbitration could violate binding treaty obligations.
Professional services firms exploit these legal complexities to avoid enforcement whilst maintaining client services that facilitate sanctions evasion. The sophisticated legal structures available to major firms enable them to operate within technical compliance whilst enabling systematic circumvention of sanctions objectives.
Current disputes including major arbitration cases against European governments demonstrate how professional services firms benefit from legal uncertainties that create enforcement gaps. Potential arbitration costs could exceed enforcement budgets, further limiting agencies’ ability to pursue complex professional services cases.
Resource constraints ensure continued evasion network operation
Limited enforcement resources guarantee that sophisticated professional services networks continue operating whilst agencies pursue politically visible but strategically insignificant cases against individuals and small businesses. This resource misallocation ensures that sanctions remain largely symbolic rather than strategically effective.
The enforcement crisis thus represents more than administrative failure; it demonstrates how current approaches enable systematic evasion whilst creating humanitarian costs for individuals and small businesses that lack sophisticated legal representation. Professional services firms continue benefiting from enforcement gaps that enable them to facilitate sanctions circumvention whilst avoiding meaningful accountability for their role in undermining sanctions effectiveness.