Overview of the GVA Capital Enforcement Action
In June 2025, OFAC fined GVA Capital nearly $216 million for willfully violating U.S. sanctions by continuing to manage investments for Russian oligarch Suleiman Kerimov after his designation as an SDN, and for failing to fully comply with a subpoena. Despite legal advice warning of sanctions risks, GVA facilitated multiple transactions benefitting Kerimov through offshore structures and proxies. The case highlights serious lapses in compliance, including delayed and incomplete document disclosure, lack of internal oversight, and a disregard for U.S. sanctions law. For compliance professionals, the key lessons include the importance of assessing both ownership and control, ensuring timely cooperation with regulators, and embedding sanctions compliance into organizational governance—especially in non-bank financial sectors like venture capital.
In June 2025, OFAC imposed its statutory maximum penalty of $215,988,868 on GVA Capital Ltd, a San Francisco-based venture capital firm. The enforcement action stemmed from GVA's handling of investments for Suleiman Kerimov—a Russian oligarch who was designated on the SDN List in April 2018—both before and after his designation. Specifically, from April 2018 to May 2021, GVA knowingly continued to manage Kerimov’s interests via his nephew Nariman Gadzhiev, acting as a proxy, in clear violation of Ukraine-/Russia-related sanctions. The firm also failed to comply fully with an OFAC administrative subpoena, compounding the gravity of the breach.
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Background: GVA’s Dealings with Kerimov and the Sanctions Violation
GVA Capital initially courted Kerimov in 2016, meeting him at his estate in France to secure his endorsement for a $20 million investment in a US-based company. Those discussions involved using Prosperity Investments LP—a Guernsey entity controlled by Heritage Trust—to channel the investment. When Kerimov was added to the SDN List in April 2018, US persons were explicitly barred from dealing with his property. Despite obtaining legal advice warning against any transactions involving Kerimov, GVA proceeded—continuing to manage the investment via Elder Gadzhiev, providing economic benefit directly back to Kerimov.
Sanctions and Blocked Property Violations
Post-designation, GVA pressed ahead with four separate transactions: a December 2018 assignment and attempted sales/distributions in 2019, 2020, and 2021. These actions constituted prohibited dealings under the Ukraine-/Russia-related sanctions regulations and the blocked property rules. OFAC deemed these actions "egregious," as they directly undermined US foreign policy objectives by enabling a sanctioned individual—Kerimov—to access and profit from US assets
Subpoena Non‑Compliance and Reporting Violations
In June 2021, OFAC issued an administrative subpoena requesting documents related to GVA’s activities with Kerimov. GVA initially produced only 173 documents by October 2021, certifying its compliance. It wasn’t until OFAC issued a Pre‑Penalty Notice in September 2023 that GVA disclosed an additional 1,300 documents—reflecting 28 months of non-compliance. OFAC treated each month of delay as a separate violation of its reporting regulations under 31 C.F.R. § 501.602
Penalty Determination: Aggravating Factors and Lack of Mitigation
OFAC calculated the penalty using its Enforcement Guidelines, applying two main aggravating factors: GVA’s willful violations despite knowing Kerimov’s SDN status and the firm’s orchestration of his continued economic benefit. The absence of any meaningful self-disclosure or full cooperation led to the imposition of the maximum statutory penalty of $214 million for sanctions violations and $1.99 million for reporting breaches, totaling $215.99 million.
Lessons for Sanctions Compliance Professionals
- Gatekeeper Duty: This case reinforces that non-bank financial actors—such as VCs and legal advisors—must adopt rigorous, risk-based sanctions controls. OFAC specifically called out “gatekeepers” who may facilitate sanctions evasion through indirect means.
- Control vs Ownership: OFAC emphasised that influence over assets—even absent formal control—can trigger sanctions liability. Relying on a rigid 50% ownership standard is insufficient; conduct-based analysis often prevails.
- Legal Advice Is Not a Shield: Although GVA sought legal counsel post-designation, it ignored warnings. OFAC scrutinises legal opinions, especially when based on incomplete facts or ignored in practice.
- Root Compliance with Subpoenas: Delays or incomplete replies to OFAC subpoenas are treated as serious, standalone offenses. GVA’s prolonged non-cooperation resulted in additional, separate penalties.
- Evidence of Willfulness Matters: Email chains, meeting records, and internal memos showing senior executives' knowledge of SDN affiliations are key to OFAC's finding of "willfulness." This drives enforcement severity.
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Conclusion
The enforcement action against GVA Capital marks a watershed moment for sanctions compliance, especially among non-bank financial intermediaries and "gatekeepers." It makes clear that diligence to detect control—even indirect involvement—is essential. Legal opinions must be credible and followed, compliance programs robust and adaptive, and responses to enforcement authorities prompt and comprehensive. For professionals in sanctions compliance, this case is a stark reminder that regulatory expectations now hold all actors accountable—not only for what they own, but for what they influence, facilitate, or The enforcement action against GVA Capital represents one of the most consequential OFAC cases involving a non-bank financial intermediary. It makes clear that sanctions compliance is a non-negotiable responsibility for all entities operating under U.S. jurisdiction, regardless of industry or size. Firms managing foreign investments or engaging in cross-border financial activity must build and maintain compliance frameworks capable of identifying and mitigating risk, especially where sanctioned individuals or entities are involved.
For compliance professionals, the takeaways are direct and far-reaching: conduct rigorous beneficial ownership checks, respond thoroughly to subpoenas, escalate red flags internally, and ensure all staff—particularly senior executives—understand their roles in upholding sanctions law. The cost of failure, as demonstrated in this case, is not just financial but reputational and operational. Sanctions compliance cannot be treated as a secondary concern; it must be embedded into the core governance of any institution engaged in international finance.
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