On June 12, 2025, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) imposed a statutory maximum $215,988,868 civil penalty on GVA Capital Ltd. (GVA Capital), a San Francisco based firm registered in the Cayman Islands, for continuing to manage a sizable US investment after the Russian investor in question had been sanctioned. This is OFAC’s first public enforcement action under the second Trump Administration and appears to be the first against a venture capital firm. The action is also notable because OFAC has charged that the violations by GVA Capital were knowing and willful.
The enforcement action highlights the ongoing regulatory focus on “gatekeepers.” The steep penalty also reflects that OFAC is continuing to enforce Russia sanctions under the Trump Administration, even as geopolitical winds may shift.
Enforcement Details
According to OFAC, the violations relate to GVA Capital’s management of a US investment for sanctioned Russian oligarch Suleiman Kerimov. Before OFAC added Kerimov to the SDN list in 2018, GVA Capital worked with Kerimov and his nephew to invest $20 million of Kerimov’s capital in a Delaware-based special purpose vehicle established by GVA Capital. This capital was invested through Prosperity Investments, L.P. (Prosperity), a Guernsey-based entity in which Kerimov held an interest.
After Kerimov’s designation, GVA Capital received legal advice “that any sale or transfer of the [investment] could not directly or indirectly involve Kerimov.” Nonetheless, for three years following the designation, GVA Capital continued to provide services, manage, and attempt to liquidate the investment, despite knowing of Kerimov’s continued interest in Prosperity. These violations included assigning Prosperity’s interest to an entity with the same beneficial ownership, attempted sales of the interest, and an attempted distribution that would have conferred significant economic benefit to Kerimov. Based on these circumstances, OFAC concluded that GVA Capital had knowingly engaged in actual and attempted prohibited dealings in blocked property and prohibited provision of services in violation of OFAC’s Ukraine-/Russia-Related Sanctions Regulations.
In announcing the resolution, OFAC also described GVA Capital’s “prolonged failure” to comply with a 2021 administrative subpoena. GVA Capital initially certified that its response was complete after producing 173 documents. Over two years later, after OFAC had issued a Pre-Penalty Notice, GVA Capital provided approximately 1,300 additional records.
Based on this conduct, OFAC determined the company’s case to be “egregious” and imposed the statutory maximum civil penalty. In doing so, OFAC identified two aggravating factors—that the violations were willful and undermined US foreign policy. With respect to intent, OFAC noted that senior management had actual knowledge that the invested funds came from Kerimov, and continued to knowingly facilitate that investment notwithstanding receiving legal advice warning of any indirect or direct investment activity. On foreign policy, OFAC found that GVA Capital “facilitat[ed] a sanctioned Russian national’s access to, and use of, the U.S. financial system in precisely the way that his designation sought to prevent,” attempting to confer hundreds of millions of dollars of economic gains through attempts to sell or distribute the investment.
Although GVA Capital had no other OFAC violations in the prior five years, OFAC determined this mitigating factor was insufficient to warrant a penalty reduction. Notably, OFAC did not mention any cooperation by the company and flagged the firm’s failure to self-report its violations.
Key Takeaways
Several features of OFAC’s enforcement action against GVA Capital stand out.
- GVA’s role as gatekeeper with special knowledge of and role in the investment increased risk. In OFAC’s own words, the “enforcement action highlights the risks that arise when gatekeepers—such as investment professionals, accountants, attorneys, and providers of trust and corporate formation services … fail to properly understand the risks associated with the provision of their services.” As a gatekeeper for Kerimov’s US investment, GVA Capital allegedly had knowledge that the transactions were on his behalf. In fact, senior management interacted with him personally prior to his designation. Through this action, OFAC is sending a message to gatekeepers that they will be a focus of this Administration, consistent with the recent policy pronouncement by the Department of Justice that financial institutions will be subject to additional scrutiny as gatekeepers for conduct that threatens U.S. markets and national security, including sanctions violations, as we have previously discussed here.
- Subpoena “non-compliance” increases exposure. OFAC explicitly referenced GVA Capital’s lack of timely and full compliance with the administrative subpoena as an aggravating factor. OFAC treated GVA Capital’s failure to fully comply with OFAC’s administrative subpoena as 28 separate reporting violations, one for each month of noncompliance, and called the company out for failing to produce more than 1,000 additional responsive documents for years after they certified that the production was complete. Such behavior further emboldens regulators to extract more serious penalties and can exacerbate a compliance violation, undermines credibility that may be important in settlement negotiations, and imposes additional risk—false certifications can form the basis for separate, potentially criminal violations for obstruction or false statements.
- OFAC may seek maximum penalties for egregious conduct. OFAC’s imposition of the statutory maximum penalty on GVA Capital suggests that the parties could not come to an agreement. This is rare—since early 2023, only one out of more than two dozen public OFAC enforcement actions resulted in a penalty or settlement amount at the statutory maximum. This underscores OFAC’s determination that the violations were sufficiently egregious based on willfulness and obstructive behavior to warrant imposition of the statutory maximum penalty.
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Companies may consider whether their sanctions compliance practices match the risk profile described in OFAC’s enforcement release for this case. OFAC expects companies to monitor the sanctions status of counterparties both at an initial transaction and over time. Gatekeepers in particular may be held to account for failing to act on information that allows them to see behind formalistic ownership structures and agents.
