Bank of Scotland fined £160,000 for breaching Russia sanctions

The Bank of Scotland has been fined £160,000 by the UK’s Office of Financial Sanctions Implementation (OFSI) for breaching sanctions imposed on Russia.

The penalty, announced on November 10, 2025, follows the processing of 24 payments totalling £77,383.39 between February 8 and 24, 2023, involving a personal account held by a UK-designated individual, Caliber.Az reports per the UK government.

OFSI found that four payments of £76,000 were credited to the account, while 20 payments totalling £1,383.39 were debited, in violation of rules prohibiting dealing with and making funds available to sanctioned persons.

The breaches occurred after the designated individual opened an account at Halifax, a Bank of Scotland division, on February 6, 2023. OFSI said the bank’s automated sanctions screening system failed to detect a spelling variation in the individual’s name.

A subsequent manual review on February 20 also failed to flag the account due to human error, allowing access to funds until February 24.

OFSI highlighted several aggravating factors, including the high value of funds made available, the circumvention of UK sanctions, and the strategic priority of Russia-related restrictions.

Outdated training, lack of clear escalation procedures for Politically Exposed Persons (PEPs), and insufficient sanctions screening were also cited. However, OFSI noted that Lloyds Banking Group (LBG), the bank’s parent company, had voluntarily disclosed the breaches on March 16, 2023, earning a 50% discount on the fine.

The penalty was reduced from an initial £175,000 following representations from LBG. Without the voluntary disclosure, OFSI said the fine would have reached £320,000. The regulator classified the case as “serious” and stressed the importance of robust sanctions compliance, including enhanced screening, clear escalation processes, and regular staff training.

By Aghakazim Guliyev