Bank of Scotland has been fined £160,000 by a UK Treasury body for processing payments that breached Russia financial sanctions rules.
The bank processed 24 payments to or from a personal current account held by a British citizen on the Government’s list of sanctioned individuals, the Office of Financial Sanctions Implementation (OFSI) found.
The payments, made between February 8 and February 24 2023, totalled £77,383.
The UK is among nations to have imposed sanctions on sectors, businesses and individuals who may be facilitating Russia’s invasion of Ukraine.
Most individuals that are sanctioned under the OFSI are subject to an asset freeze and an investment ban.
The OFSI found that the UK-designated person opened an account at Halifax, part of Bank of Scotland, on February 6 2023, using a UK passport that contained a spelling variation of their name that differed from the one on the sanctions list.
The 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 automatic sanctions screening system.
The account remained unrestricted until February 24 2023 when the customer was identified as a designated person as part of a so-called politically exposed person (PEP) screening.
The penalty for Bank of Scotland, which is part of Lloyds Banking Group, was cut by 50% thanks to it voluntarily disclosing the breaches a month after the payments were made.
A spokeswoman for Lloyds Banking Group said it “takes its regulatory responsibilities extremely seriously”.
“We acted swiftly and transparently, proactively referring this one-off, isolated matter to OFSI and working closely with them throughout,” the company said.
“OFSI has recognised our prompt voluntary disclosure, resulting in the maximum possible reduction of the penalty.
“We have further strengthened our controls to ensure we continue to meet the highest standards of risk management and governance.”
