The UK’s Office of Financial Sanctions Implementation (OFSI) has levied a £160,000 monetary penalty on Lloyds Banking Group for violations of Russia sanctions made by its subsidiary Bank of Scotland Plc. 

OFSI said the penalty, which was imposed in November and disclosed on Monday, related to 24 payments that were processed in February 2023 on behalf of a designated individual who had opened a personal account at the bank’s trading division in Halifax. 

Despite being the subject of UK sanctions, the individual that month successfully opened an account using a British passport that spelled the person’s name differently from how it was cited in OFSI’s consolidated sanctions list. The bank’s compliance team ultimately flagged the client several weeks later as part of a more thorough screening for politically exposed persons (PEPs), OFSI said. 

Although not identified by the sanctions office, the blacklisted client was named by the Financial Times and other news outlets as Dmitrii Ovsiannikov, a former governor of Sevastopol in Russia-controlled Crimea who was appointed by Russian President Vladimir Putin. 

British authorities last year jailed Ovsiannikov for 40 months after he was convicted of sanctions violations and money laundering, the FT said. 

Because Bank of Scotland’s sanctions-screening system did not reconcile the Russian-to-English transliteration equivalents of the various spellings of his names, he was initially given unfettered access to account services, according to OFSI, which also criticized the lender for failing to identify Ovsiannikov quickly once it had begun its screening for PEP-related activity. 

Read more at OFSI

Read more at the Financial Times