Export Control & International Sanctions: Record fine in Guernsey for ITI Trade Ltd

On July 18, 2025, the Guernsey Financial Services Commission (GFSC) imposed a cumulative penalty of £210,000 on ITI Trade Ltd and its director, Alex Phil (formerly Alexei Filatov). This fine marks a turning point in the supervision of sanctions regime obligations and serves as a stark reminder of the risks associated with uncontrolled outsourcing to high-risk jurisdictions.

Behind the facade of a Guernsey -registered investment company, ITI Trade operated primarily as a conduit for activities conducted from Russia- a practice made even more problematic by the fact that sanctions against the Russian Federation have been significantly tightened since the outbreak of war in Ukraine in 2022.

The GFSC highlighted a surge in flows and assets under management (+440% in the first half of 2022), against a backdrop of tougher international sanctions regimes. However, this rapid expansion of operations did not prompt an appropriate response from ITI Trade’s management, who maintained a largely fictitious compliance structure.

As a result, the company ceased operations and administrators were appointed by the Royal Court. The GFSC emphasized the seriousness of the breaches, particularly given the high-risk profile of the clientele and the lack of effective controls to manage these risks.

Major compliance and sanctions breaches

The Commission’s investigation revealed a series of systemic failures, particularly regarding Export Control & Sanctions obligations:

No reliable screening mechanism, particularly for Russian nationals or politically exposed persons (PEPs);

Outsourcing of customer and financial flow controls to a Russian sister company, under conditions deemed “rudimentary” and without effective supervision;

Lack of country/customer risk mapping, preventing a coherent view of exposures;

Failure to identify beneficial owners for more than 75% of assets under management (108 unidentified individuals).

Worse still, the director personally altered a compliance report intended for the regulator, attempting to conceal the extent of internal deficiencies.

The fundamental principle: responsibility cannot be delegated

This case clearly illustrates a cardinal principle of sanctions law and export control:

Regulatory responsibility can never be fully transferred.

When certain functions -such as screening, KYC, or customer management- are outsourced, the company remains solely responsible for the compliance of the entire system in the eyes of the supervisory authorities. This applies to financial companies as well as industrial companies.

A strong signal to players in the trade and finance sectors

This record fine (even if its amount seems relatively symbolic in view of the offenses charged and the volumes referred to) is a clear warning to financial institutions, brokerage firms, and exporters:

It is not enough to have a license in a reputable jurisdiction to comply.

It is necessary to demonstrate real, local, proactive mastery of the obligations relating to the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA/LCB-FT) and sanctions.

International sanctions regimes (UK, EU, US) now impose high standards that brook no leniency, even within complex structures or those spread across several countries.

Key points: best practices to adopt

To avoid the pitfalls of the ITI Trade case, here are some essential best practices to implement:

• Rigorous auditing of service providers and related entities, particularly in high-risk jurisdictions;
• Independent, verifiable, and documented screening of clients and partners, particularly those exposed to sanctions or blacklists;
• Active supervision of outsourced functions, with contracts setting out responsibilities and alert mechanisms;
• Up-to-date risk mapping, incorporating geopolitical and regulatory developments;
• Total transparency with the authorities: concealing a breach aggravates the penalty, including for executives personally.

The ITI Trade case reveals a common pitfall in cross-border models: confusing license with legitimacy, and formal compliance with substantive compliance.

It also shows that regulators will no longer tolerate opaque arrangements, unclear responsibilities, or superficial controls.

In a world where sanctions are becoming a major tool of international policy, any company operating internationally must, to succeed, make compliance a strategic priority, on a par with its commercial performance.