Bank of Scotland, part of Lloyds Banking Group, has been fined £160,000 for breaching Britain's financial sanctions regime after it opened an account for a previously high-ranking Russian government figure who was a designated person on the UK's sanctions list.
The bank processed 24 payments in February 2023 totalling about £77,000 to and from a personal current account held by a UK-designated person, the Office of Financial Sanctions Implementation said.
A person familiar with the matter told Reuters that the account was opened for Dmitrii Ovsyannikov, a British citizen.
The OFSI said the person in question, who it did not identify, had used a British passport containing a spelling variation of their name on the designation list when opening the account with Halifax, part of the Bank of Scotland.
Ovsyannikov was sentenced to 40 months in prison last year after he was found guilty of breaching UK sanctions and money laundering.
He held several senior positions in the Russian government and was appointed by President Vladimir Putin as the governor of Sevastopol following Russia's annexation of Crimea, the Crown Prosecution Service said last April after the conviction.
OFSI - the UK finance ministry agency that enforces government sanctions - said it had concluded that the bank breached prohibitions on dealing with, and making funds available to, a sanctioned person.
The watchdog said Lloyds voluntarily reported the payments on behalf of Bank of Scotland in March 2023, and that the final penalty amount was halved owing to the voluntary disclosure.
In response to the fine, a Lloyds spokesperson said the company had "acted swiftly and transparently, proactively referring this one-off, isolated matter to OFSI".
"We have further strengthened our controls to ensure we continue to meet the highest standards of risk management and governance," the spokesperson said.
Ovsyannikov has been on Britain's sanctions list since 2017, and was granted a British passport in January 2023, according to the CPS.
