Britain’s Office of Financial Sanctions Implementation (OFSI) has fined Deutsche Bank AG’s London branch £165,000 for processing two payments totaling £635,618.75 to a Russian-owned online media streaming company in breach of UK sanctions on Moscow. 

The payments, processed in June and July 2022, were made to Okko LLC, a Russian app developer and streaming platform wholly owned at the time by JSC New Opportunities, a designated person under the Russia (Sanctions) (EU Exit) Regulations 2019, the notice said. The bank was acting on instructions from a customer, an Irish-incorporated subsidiary of a multinational firm, that had a commercial relationship with Okko.

The ownership chain at the center of the breach traces to Russia’s largest bank. PJSC Sberbank had owned Okko since 2018 before selling it to JSC New Opportunities on 17 May 2022, weeks after Sberbank itself was designated by the UK in April 2022, according to the notice. JSC New Opportunities was then designated on June 29, 2022,  the same day Deutsche Bank processed the first payment.

Although OFSI elected not to name the Irish-incorporated subsidiary of a multinational bank in its penalty notice, the stated facts mirror a £390,000 fine and enforcement action issued against Apple Distribution International Ltd in March. In that notice, OFSI said the Irish subsidiary of Apple Inc instructed a UK bank to make two payments totaling £635,618.75 to Russian streaming company Okko LLC in June and July of 2022.

On Tuesday, OFSI said Deutsche Bank’s third-party screening vendor had updated its lists to include the designation of JSC New Opportunities but had not captured Okko’s ownership by that entity, meaning no automated alert was generated for either payment. Open-source media articles published in May 2022 had reported the transfer of Sberbank’s digital assets to JSC New Opportunities, but OFSI found no evidence Deutsche Bank or its vendor was aware of them at the time.

The regulator assessed the case as “serious” and set a baseline penalty of £300,000 before applying a 45 percent discount to reflect the bank’s voluntary self-disclosure in September 2022 and its agreement to settle the case, reducing the final penalty to £165,000. 

OFSI noted, however, that Deutsche Bank’s initial disclosure lacked detail and fell below expectations for an institution of its size, limiting the discount below the maximum 50 percent available.