Major UK bank fined for breaching Russian sanctions
Bank of Scotland has been fined £160,000 by the UK Treasury after processing payments that breached financial sanctions imposed on Russia.
The Office of Financial Sanctions Enforcement (OFSI) found the bank processed 24 transactions totaling £77,383 from the personal current account of a British national listed under the government’s sanctions regime.
These payments occurred between February 8 and 24, 2023.
The United Kingdom, alongside its international allies, has imposed sweeping sanctions on Russian industries, businesses and individuals in response to the invasion of Ukraine. Such appointments often include asset freezing and investment bans.
OFSI’s investigation revealed that the UK-designated individual opened an account in Halifax, a subsidiary of Bank of Scotland, on 6 February 2023.
They reportedly used a UK passport containing a spelling variation of their names different from those on the official sanctions list.
Variations included changes in characters and a missing middle name.
This meant the account was not flagged as a potential match by the bank’s automated sanctions screening system.
The account remained unrestricted until February 24, 2023, when the customer was identified as a designated person under so-called politically exposed person (PEP) screening.
The fine imposed on Bank of Scotland, part of Lloyds Banking Group, was reduced by 50 per cent after it voluntarily disclosed the breaches a month after payments were made.
A spokesman for Lloyds Banking Group said it “takes its regulatory responsibilities extremely seriously”.
“We acted quickly and transparently by proactively raising this one-off, isolated matter with OFSI and working closely with them,” the company said.
“OFSI accepted our voluntary expedited clarification, which resulted in the penalty being reduced to the maximum extent possible.
“We have further strengthened our controls to ensure we continue to meet the highest standards of risk management and governance.”
