A sanctions case with an Apple name on it

The UK government has fined Apple Distribution International (ADI), a subsidiary of Apple based in the Republic of Ireland, £390,000 for breaching sanctions linked to Moscow. The violation involved two payments made to a Russian streaming platform, Okko, through a UK-based bank account.

The payments, which totalled more than £635,000, were instructed by ADI to an unnamed bank in Britain. ADI is the entity responsible for selling Apple products across Europe and the Middle East, including through the company’s app store. So yes, even the fine print gets its moment.

What happened

According to the UK Treasury’s sanctions watchdog, the Office of Financial Sanctions Implementation (OFSI), the case centred on payments made in June and July 2022. By then, the situation around Okko had already become a sanctions headache.

Okko had been acquired by Sberbank, Russia’s largest bank, in 2018. After Russia’s full-scale invasion of Ukraine in February 2022, the service was sold to JSC New Opportunities, a company that the UK government placed under sanctions in June 2022.

Sberbank itself was among the first Russian companies added to the UK sanctions list after the invasion.

Why the UK says it fined ADI

OFSI said it imposed the penalty after settlement talks and because it was satisfied, “on the balance of probabilities”, that ADI had breached sanctions rules.

At the same time, the watchdog said ADI had voluntarily disclosed the payments and had no reason to believe they would fall foul of sanctions.

It also noted that while public press reports had said Okko was wholly owned by a designated person, there was no evidence ADI knew about those reports when the payments were made, or that its third-party screening providers knew about them either.

That detail matters because, as OFSI helpfully pointed out, using outside sanctions-screening firms does not magically remove risk. A glamorous workaround this is not.

Why this matters beyond Apple

OFSI said the case shows that non-UK companies can still breach UK sanctions rules if they use UK financial institutions to make payments.

The watchdog added that firms should have strong due diligence systems to monitor clients and customers, especially when relying on third-party screening services.

The Foundation for Defense of Democracies, a US thinktank, said the sale of Okko by Sberbank to an “obscure company” was probably an effort to shield the asset from western sanctions. JSC New Opportunities was created in March 2022, just months before it was sanctioned.

Apple’s response

An Apple spokesperson said the company takes sanctions compliance seriously and moved quickly once it identified the issue.

“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.”