Bank of Scotland Faces Fine for Breaching UK Russia Sanctions
The Bank of Scotland has been fined £160,000 ($218,640) for breaching UK sanctions by opening an account for a sanctioned individual. This decision comes from the Office of Financial Sanctions Implementation (OFSI) of the UK finance ministry.
Details of the Breach
The breach involved 24 payments processed in February 2023, amounting to approximately £77,000. These payments were made to and from an account linked to Dmitrii Ovsyannikov, a previously high-ranking Russian government official.
Sanctioned Individual
- Name: Dmitrii Ovsyannikov
- Nationality: British citizen
- Criminal Conviction: 40 months in prison for sanction breaches and money laundering (sentenced last year)
- Position: Former governor of Sevastopol, appointed by President Vladimir Putin
- Sanctions Status: On the UK sanctions list since 2017
- Passport Issuance: Granted a British passport in January 2023
Regulatory Response
The OFSI indicated that the bank’s actions were a violation of regulations prohibiting dealings with sanctioned individuals. Lloyds voluntarily reported the transactions in March 2023, leading to a reduction of the initial fine. The final penalty was halved because of this disclosure.
Bank’s Compliance Measures
A representative from Lloyds stated that the bank acted quickly and openly regarding this isolated incident. He noted that additional controls have been implemented to enhance risk management and governance practices.
While the breach involved serious implications, it serves as a reminder of the importance of compliance in financial transactions, particularly in sensitive geopolitical contexts.
