UK Bank Fined £20 Million for Ukraine Sanctions Violations
A United Kingdom bank was fined more than £20 million by the U.K.’s Office of Financial Sanctions Implementation for violating Ukraine-related sanctions, OFSI said in a notice released March 31. OFSI said Standard Chartered Bank (SCB) made more than 100 loans to Denizbank A.S., which is owned by Russia-based Sberbank, an entity sanctioned by the European Union. While some of the loans qualified for an EU exemption under the sanctions regime, about 70 of the loans did not qualify. OFSI estimated the value of the 70 loans at about $290 million and deemed the case “most serious.”
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The bank was aware of the sanctions violations and initially sought to make loans to Denizbank “where they considered an exemption was applicable,” the notice said. But SCB did not use the exemptions correctly, allowing “loans to be made which were not within any exemption” and which “persisted over an extended period of time.”
Because SCB self-disclosed the violations and cooperated with OFSI, the agency reduced the penalty by 30%, the notice said. SCB gave OFSI a “detailed report” of its own investigation into the violations with “interim updates,” did not “willfully” violate EU sanctions, acted in “good faith” and took “remedial steps following the breach,” the notice said.
The U.K. stressed the importance of sanctions compliance programs and said companies should make sure they “fully understand” sanctions exemptions before using them. It is “good practice” for companies to “continuously review their own due diligence and compliance processes” to avoid sanctions violations, the notice said, adding that it “values voluntary disclosure.” In a separate case, SCB was fined more than $650 million last year by the U.S. for sanctions violations (see 1904090055).