Deutsche Bank’s London branch has been fined £165,000 by a UK Treasury body for processing payments that breached Russia financial sanctions rules.
The global financial firm processed two payments linked to a sanctioned Russian entity in June and July 2022, the Office of Financial Sanctions Implementation (OFSI) said.
The transactions, totalling £635,618.75, were sent by one of the bank’s customers to a Russian company called Okko, which operates an online video streaming platform.
Okko was owned by a sanctioned company called JSC New Opportunities.
Deutsche was sourcing screening lists from a third-party provider at the time of the breach, which did not include data on Okko or its ownership and therefore did not alert the bank to any issues, the OFSI said.
The OFSI, which is part of the Treasury, said there were risks in Deutsche’s decision to rely on a third party for some of its sanctions screening, and that it was ultimately responsible for making sure financial sanctions rules were being met when processing customer payments.
It noted that another payment totalling £1.1 million was made to Okko in April 2022 but that it was not classed as a breach because it occurred prior to changes to how sanctions rules are enforced.
The UK is among nations to have imposed sanctions on sectors, businesses and individuals who may be facilitating Russia’s invasion of Ukraine.
The OFSI said that sanctions “imposed by the UK in respect of Russia were a strategic priority for the UK and its foreign policy” in 2022 and “remain so today”.
Most individuals that are sanctioned under the OFSI are subject to an asset freeze and an investment ban.
About 20 companies have been fined since 2019 for breaching the rules.
This includes Bank of Scotland, part of Lloyds Banking Group, which was fined £160,000 in January for processing 24 payments to or from an account linked to a sanctioned person in February 2023.
Deutsche agreed to settle the case last month and qualified for a discount on the fine having voluntarily disclosed details of the Okko payments.
A spokesperson for the bank said: “After identifying two payments to a Russian entity that had become affiliated with a sanctioned entity, we voluntarily disclosed this to OFSI.
“Deutsche Bank takes sanctions compliance extremely seriously.
“We have strengthened and continue to strengthen all aspects of our sanctions compliance framework and associated processes.”
