Apple Subsidiary Fined Over Sanctions Breach
Apple Distribution International (ADI), an Apple subsidiary based in Ireland, has been fined £390,000 by the UK government for violating sanctions related to payments made to a Russian streaming platform.
ADI instructed a UK-based bank to execute two payments exceeding £635,000 in total to Okko, a streaming service owned by a sanctioned Russian entity. These transactions were conducted from an ADI bank account located in the United Kingdom. ADI manages the sale of Apple products in Europe and the Middle East, including transactions through Apple's app store.
Details of the Fine and Investigation
The fine was imposed by the Office of Financial Sanctions Implementation (OFSI), the UK’s sanctions enforcement authority within the Treasury.
“OFSI imposed a monetary penalty on ADI because it was satisfied, in relation to these payments, that on the balance of probabilities, ADI had breached prohibitions imposed by financial sanctions legislation,”
the watchdog stated.
Background on Okko and Sanctions Context
Okko was acquired by Sberbank, Russia’s largest bank, in 2018. Following Russia’s invasion of Ukraine in early 2022, Sberbank sold Okko to JSC New Opportunities, a company sanctioned by the UK government in June 2022. The payments from ADI to Okko occurred in June and July 2022.
Sberbank itself was added to the UK’s sanctions list after the invasion in February 2022.
The Foundation for Defense of Democracies, a US think tank, commented that the sale of Okko by Sberbank—sanctioned in March 2022—to an "obscure company" was likely an attempt to protect assets from Western sanctions. JSC New Opportunities was established in March 2022.
OFSI’s Findings and ADI’s Response
OFSI noted that ADI voluntarily disclosed the payments and that the fine was imposed following settlement discussions. The agency also stated that ADI had no reason to suspect the payments violated sanctions.
“Whilst there were publicly available press articles stating that Okko was wholly owned by a designated person, there is no evidence that ADI was aware of those press articles at the relevant time or that third-party diligence providers were aware of this information,”
OFSI explained.
OFSI emphasized that non-UK companies could still breach sanctions if they use UK financial institutions for payments. The watchdog advised firms to maintain robust due diligence systems to monitor clients and customers, noting that reliance on third-party sanctions screening services—as ADI did—carries inherent risks.
Apple’s Statement
An Apple spokesperson 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.”
