You cannot do indirectly what you cannot do directly: the FTI Consulting settlement.
An invoice, expert economic consulting, and a law firm in between — and OFAC still looked through the structure to who ultimately paid.
Enforcement · 11 Oct 2026
On June 1, 2026, OFAC settled with FTI Consulting for $1,050,000 over expert economic consulting services arranged through a law firm for a Russian state-owned bank on the SSI List. FTI never invoiced the bank directly — the structure was built specifically to avoid that. OFAC alleged apparent violations.
What happened
FTI contracted with the law firm, not with VTB Bank, and invoiced the law firm, which would pay only after VTB paid it. In practice, VTB was always the party responsible for payment, and it paid late, partially, or not at all. Six invoices issued in 2019 remained unpaid, partly paid, or were paid late; the apparent violations continued through May 2021. OFAC treated those invoices as indirect extensions of credit well past the 14-day limit applicable to this 2019 debt under Directive 1 under E.O. 13662, as amended September 29, 2017, paragraph (3) — for the benefit of a sanctioned bank.
Economic reality governs, not paperwork. A payment structure that routes around a sanctioned party does not cure a prohibited dealing; OFAC looks through the form to who ultimately benefits and who ultimately pays.
The settlement was twice the base amount. OFAC classified the apparent violations as non-egregious and not voluntarily self-disclosed, despite FTI’s later notification. It reported a $525,000 base penalty and a $1,050,000 settlement. The two-to-one comparison is arithmetic; OFAC did not describe a separate formula that doubled the base. It stated that the settlement was aggravated above base after considering the General Factors under its Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, appendix A, particularly the anticipated impact on future compliance by similarly situated persons.
OFAC identified missed warning signs involving senior managers, harm from extending prohibited credit and obscuring transaction activity, and FTI’s commercial sophistication as aggravating factors. It also credited cooperation and tolling, the transactions’ small relative volume, compliance enhancements, and the absence of a Finding of Violation or Penalty Notice in the preceding five years. The release does not assign a dollar amount to each factor. The company-side lesson is to examine the payment arrangement’s economic effect even when the invoices are small relative to the business.
What this means for you
A sanctioned counterparty’s failure to pay on time can create more than a billing problem: under applicable debt restrictions, a late or unpaid invoice may create a prohibited extension of credit. In FAQ 419 (November 28, 2017), OFAC explains that service-payment terms must conform to the applicable debt tenor and advises contacting OFAC if timely full payment may not occur. This describes the debt issue in the historical action, rather than permission to deal with VTB today. And involving compliance is necessary but not sufficient: FTI’s compliance team was in the room, and the arrangement it blessed is what OFAC penalized. A structure built to look compliant deserves the most scrutiny, not the least.
If your firm retains experts, advises across borders, or takes on engagements where the ultimate beneficiary is not the signing party, this is the moment to pressure-test the structure. Contact Zimmermann Law to talk it through.
This post provides general information, not legal advice. Sanctions analysis is fact-specific and changes over time.
Sources: OFAC, FTI Consulting, Inc. enforcement release (June 1, 2026), pp. 1–6, especially pp. 3–5, retained as `440_2026-06-01__20260601_fti.pdf`; Directive 1, as amended September 29, 2017, paragraph (3) and avoidance provision; OFAC FAQ 419 (November 28, 2017); Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, appendix A, General Factors and § III.J. Directive requirements are mandatory U.S. federal sanctions rules within their scope; the FAQ and Guidelines describe the agency’s interpretation and enforcement approach. The release describes apparent violations and the reported settlement; it is not an adjudication. Checked October 9, 2026. This is an account of the June 2026 settlement and 2019–2021 conduct, not a current VTB transaction-permission analysis.
This post is for general information and is not legal advice.
Attorney Advertising. Zimmermann Law PLLC · New York · +1 (917) 426-4625 · contact@zimmermann-law.com