Bank of Scotland Fined for Sanctions Breach Linked to Russian Ex-Government Official

The Bank of Scotland, part of Lloyds Banking Group, has been fined £160,000 for breaching UK's financial sanctions by opening an account for a sanctioned Russian ex-government official. The bank processed payments connected to Dmitrii Ovsyannikov, exposing gaps in risk management and sanctions compliance.

In a significant breach of the UK's financial sanctions regime, the Bank of Scotland has been fined £160,000 for opening an account for a formerly high-ranking Russian official on the UK's sanctions list. Part of Lloyds Banking Group, the bank processed 24 payments amounting to £77,000 for Dmitrii Ovsyannikov, according to the Office of Financial Sanctions Implementation (OFSI).

The account was opened using a British passport with a name variation of Ovsyannikov, who previously held senior roles in the Russian government. His activities included serving as the governor of Sevastopol after Crimea's annexation, under appointment by President Vladimir Putin. Ovsyannikov was imprisoned last year for UK sanctions breaches and money laundering.

Lloyds Banking Group disclosed the breach voluntarily and received a reduced penalty. The bank assured improved controls for future compliance, while Ovsyannikov's legal team maintains he believed earlier European rulings would remove UK sanctions. Despite gaining a British passport in 2023, Ovsyannikov remains on the UK's sanctions list since 2017.

(With inputs from agencies.)