Bank of Scotland Fined for Sanction Breach

LONDON, Jan 26 – The Bank of Scotland, which is part of Lloyds Banking Group, has received a fine of £160,000 ($218,640) for violating the UK’s financial sanctions by opening an account for a former Russian official on the sanctions list.

The Financial Sanctions Enforcement Office (OFSI) reported on Monday that the bank handled 24 payments amounting to roughly £77,000 during February 2023 between personal accounts linked to designated individuals in the UK.

Reports indicate that the account was opened for British national Dmitri Ovsyanikov.

OFSI noted that the individual used a British passport, although the name had some spelling discrepancies compared to the official sanctions list. However, they have not publicly identified this person.

Ovsyanikov was convicted last year on charges of breaching British sanctions and money laundering, resulting in a 40-month prison sentence.

He held high-ranking positions in the Russian government and was appointed as the governor of Sevastopol by President Vladimir Putin following Russia’s annexation of Crimea, as per announcements made by the Crown Prosecution Service last April.

OFSI, the UK Treasury agency responsible for enforcing sanctions, stated that the bank directly breached regulations related to engaging with sanctioned individuals.

Importantly, it was mentioned that Lloyds voluntarily disclosed the payments on behalf of the Bank of Scotland in March 2023, which resulted in the fine being reduced by half.

A spokesperson for Lloyds said the bank acted swiftly and transparently in reporting this isolated issue to OFSI and has since strengthened its internal controls to ensure compliance with risk management standards.

A legal representative for Ovsyanikov did not respond to requests for statements.

Notably, he has been listed under UK sanctions since 2017 and acquired a British passport in January 2023, according to the Crown Prosecution Service.