Deutsche Bank hit with six-figure fine in UK for breaching Russia sanctions
Deutsche Bank has been slapped with a six-figure fine by the Treasury’s financial sanctions body for processing payments that breached sanctions on Russia.
The German multinational investment bank has been handed a £160,000 fine after it was found to have authorised two payments linked to a sanctioned Russian firm between the periods of June and July 2022.
Okko, which operates an online video platform, received a total of £635,618.75 from a Deutsche customer and is owned by sanctioned company JSC New Opportunities.
The Office of Financial Sanctions Implementation (OFSI) found Deutsche was using screening lists from a third-party at the time that did not include data on the ownership of Okko and as a result did not flag the breach.
Deutsche fine ‘underlines importance of robust sanctions screening’
The OFSI added there was risks in using this external party for sanctions screening and that the final responsibility fell with the bank for ensuring correct rules were followed.
“This case underlines the importance of firms maintaining suitably robust sanctions screening systems and processes, commensurate with their level of exposure to sanctions risk,” it said.
“While third-party screening tools are often a vital component of a firm’s control framework, firms must be aware of, and account for the limitations of these, supplementing with their own processes where appropriate.”
Deutsche was also found to have processed another payment – totalling £1.1m – to Okko in April 2022. This was not classed as a breach as it took place before the sanction rules came into effect.
The OFSI said the sanctions imposed by the UK on Russia were a “strategic priority… and remain so today”.
Some 20 companies have faced action for breaching the rules since 2019.
In January, a subsidiary of Lloyds Banking Group was fined for sanctions breaches after opening a bank account for an ally of Vladimir Putin.
The Bank of Scotland was handed a £160,000 fine for processed 24 payments, totalling £77,383, from a personal current account held by an individual under Russian sanctions.