The UK’s sanctions watchdog has fined Bank of Scotland £160,000 for opening a bank account and processing payments for an ally of Vladimir Putin.
Dmitrii Ovsiannikov, who became the first person to be prosecuted for circumventing UK sanctions last year, made 24 payments totalling £77,383 to or from a personal current account during February 2023.
The Russian has held senior positions in Russian government and is a former governor of Sevastopol, in Russian-occupied Crimea.
The EU made Ovsiannikov a designated person under its sanctions legislation in November 2017, saying his work had compromised or threatened the territorial integrity, sovereignty and independence of Ukraine. This restricted him from entering or accessing funds in member states including the UK, then still an EU member.
After Brexit he was added to the UK’s list. The EU annulled Ovsiannikov’s designation in 2022 but he has remained on the UK list.
On 4 August 2022 he made an online application from Turkey for a UK passport, having travelled from Russia to Turkey three days earlier, the court heard during his criminal prosecution.
In the banking case, the Office of Financial Sanctions Implementation (OFSI) found that Ovsiannikov opened an account at Halifax, part of Bank of Scotland, on 6 February 2023 using his UK passport, which contained a spelling variation of his name that differed from those on the sanctions list. This meant the account was not flagged as a potential match by the bank’s automatic sanctions screening system.
The account remained unrestricted until 24 February 2023 when the bank identified him as a designated person as part of a “politically exposed person” screening.
The penalty for Bank of Scotland, which is part of Lloyds Banking Group, was cut by 50% because it voluntarily disclosed the breaches a month after the payments were made.
A spokesperson for Lloyds Banking Group said it “takes its regulatory responsibilities extremely seriously”.
The company said: “We acted swiftly and transparently, proactively referring this one-off, isolated matter to OFSI and working closely with them throughout. 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.”
Ovsiannikov was not named in the OFSI notice. However, a source familiar with the case confirmed that he was the individual in question.
Efforts to contact Ovsiannikov were unsuccessful.
