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Apple’s Irish subsidiary has been fined more than half a million dollars by the UK government for breaking sanctions against Russia. Apple Ireland has been fined £390,000 ($516,110) for making payments to a sanctioned Russian streaming platform in 2022.
The Office of Financial Sanctions Implementation (OFSI) said that Apple Distribution International Ltd. (ADI), the Republic of Ireland-based entity Apple uses to pay App Store developers, made two payments totaling £635,618 to Okko LLC, a Russian video streaming platform in June and July 2022:
2. OFSI imposed the penalty for breaches of the Russia (Sanctions) (EU Exit) Regulations 2019 (“the Russia Regulations”), namely regulation 12 which prohibits (among other conduct) making funds available to a person owned or controlled by a designated person. 3.
3. ADI, a non-UK person, instructed a UK based bank to make two payments (one in June 2022 and another in July 2022) totalling £635,618.75 to Okko LLC (“Okko”), a company wholly owned at the time of the payments (and in the case of the July payment also at the time of payment instruction) by the designated person JSC New Opportunities (UKSL ref RUS1489). ADI did not cancel these instructions, leading to the subsequent release of funds to Okko. This conduct, in particular the failure to cancel (an omission), amounted to conduct in the UK by ADI.
Okko was subject to UK sanctions following Russia’s invasion of Ukraine. While the UK is not part of the European Union, the payments were made via a UK-based bank.
ADI voluntarily disclosed the payments to OFSI, and the agency confirmed that no breach had been attributed to Apple Inc. itself.
In a statement, Apple said:
We follow the laws in the countries where we operate and take sanctions compliance extremely seriously. After identifying two payments to a developer that days earlier had become affiliated with a sanctioned entity, we promptly and proactively reported our finding to the UK government. We are constantly working to enhance our already robust compliance protocols, which are consistent with industry standards.
According to OFSI, Apple had relied on corporate affiliates to handle payment processing, sanctions screening, and due diligence. However, such companies are responsible for ensuring their own compliance with rules.
While Apple could have been liable for a $1.3 million fine, the amount was lower because the company voluntarily disclosed the payments, and because it had waived its right to appeal.