On June 12, 2025, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) published a notice on its website announcing the imposition of a $216 million fine on GVA Capital Ltd. for violating OFAC sanctions against Russia and for failing to comply with an OFAC subpoena during the investigation of the case. The announcement also prominently featured Russian oligarch Suleiman Kerimov as a key figure. GVA Capital Ltd. had provided investment management services to Suleyman Kerimov over the course of several years.

Why Did OFAC Fine GVA Capital Ltd.?

According to OFAC’s Enforcement Release dated June 12, 2025, GVA Capital Ltd. was fined for violating U.S. sanctions related to Russia’s actions in Ukraine. In addition to the sanctions violations GVA Capital failed to comply with an OFAC subpoena issued during the course of its investigation .

What stands out in this case is the size of the penalty: $216 million, the maximum fine allowed under OFAC regulations. Such a severe penalty is typically reserved for egregious cases involving willful misconduct, including blatant violations of sanctions laws and refusal to provide documents or cooperate with OFAC’s inquiries.

It appears that GVA Capital Ltd.’s leadership consistently neglected sanctions compliance obligations over several years. The company also seems to have underestimated the seriousness of the situation and the legal consequences of failing to respond appropriately to the OFAC subpoena.

OFAC’s investigation focused on how GVA Capital received funds from Suleiman Kerimov and used them for investments in the United States. A key point of scrutiny was how the company handled its relationship with Kerimov after his designation on OFAC’s Specially Designated Nationals (SDN) List on April 6, 2018.

Suleiman Kerimov as a Client of GVA Capital Ltd.

According to OFAC, representatives of GVA Capital met with Russian oligarch Suleiman Kerimov at his residence in France in 2016 to seek his approval for several investment projects specifically tailored for him. This meeting likely marked the beginning of a broader partnership between GVA Capital and Kerimov.

GVA Capital Ltd. is a venture capital firm registered in the Cayman Islands, with its headquarters in San Francisco, California. The company focuses its investments on artificial intelligence, financial technologies, robotics, and autonomous vehicle technologies. After Kerimov gave his approval, all further communications were directed to Nariman Gadzhiev – Kerimov’s nephew and key financial intermediary.

In November 2022, Nariman Gadzhiev was added to OFAC SDN List, along with other members of Kerimov’s family. Gadzhiev represented Kerimov in dealings with GVA Capital from 2016 until at least 2023, well after Kerimov himself was added to the SDN list in April 2018. During this period, GVA Capital carried out, or attempted to carry out, several major investment transactions on behalf of Kerimov, in violation of U.S. sanctions.

Many of these transactions were facilitated through a special-purpose trust, Heritage Trust, established in Delaware in July 2017 for the benefit of Suleiman Kerimov. Assets held in the trust exceeded $1 billion. Heritage Trust was added to the OFAC SDN list in June 2022, and its manager, Kerimov’s other nephew, Ruslan Gadzhiev was designated in March 2022.

As part of the investigation, OFAC issued a subpoena to GVA Capital on June 2, 2021, requesting various documents related to the company’s operations. In response, GVA Capital submitted 173 documents in October 2021, claiming it had fully complied with the subpoena. However, on September 13, 2023, OFAC issued a Pre-Penalty Notice to GVA Capital, citing the company’s failure to provide all relevant information. In response, GVA submitted approximately 1,300 additional documents and again asserted it had fulfilled its disclosure obligations.

Nonetheless, OFAC concluded that the company still withheld significant information that should have been disclosed under the subpoena. As a result, OFAC determined that GVA Capital had committed 28 violations of the Reporting, Procedures and Penalties Regulations of the Reporting, Procedures and Penalties Regulations. On August 22, 2024, GVA Capital received a second Pre-Penalty Notice from OFAC.

Why OFAC Imposed Such a Large Penalty

After reviewing GVA Capital’s responses to two Pre-Penalty Notices, OFAC imposed the maximum possible civil penalty of $215,988,868. Of this amount, $214 million was allocated for violations of Russia-Ukraine-related sanctions, while nearly $2 million was allocated for reporting and compliance failures.

The severity of the penalty was primarily due to the company’s failure to voluntarily disclose the full scope of the relevant information during the investigation, as well as OFAC’s classification of the sanctions violations as an “egregious case.”

The most significant aggravating factor was that GVA Capital knowingly violated U.S. sanctions. Senior executives at the firm were aware that the funds being invested ultimately originated from Suleiman Kerimov, who had been designated under OFAC’s sanctions program. The company’s efforts to create a formal separation between Kerimov and his financial vehicles, such as through the establishment and operation of Heritage Trust, were not sufficient to mitigate its liability.

Conclusion

This case clearly demonstrates the critical importance of taking OFAC sanctions compliance seriously. It underscores the need for diligent monitoring of potential violations, as well as timely and complete responses to OFAC’s requests for additional information, subpoenas, and especially pre-penalty notices.

At the same time, the case also highlights that there is usually a significant period between the initial discovery of a potential sanctions violation and the imposition of a penalty. This window can and should be used to take all necessary steps to address OFAC’s concerns and potentially avoid fines or other enforcement actions.

Ideally, this process should be navigated with the support of an experienced U.S. sanctions attorney. The risks in such matters are high, and any oversight or misstep could lead to substantial financial and reputational consequences.