Key facts
- Citibank was fined £4.7m for violating UK sanctions on Russia.
- The bank processed £19.7m in illicit transactions across 970 payments.
- Citi failed to freeze 24 accounts linked to a sanctioned Russian individual.
- The bank temporarily altered its compliance guidance in May 2022.
- OFSI rated the severity of the case as 'high'.
Citibank has been fined £4.7 million by the UK's Office of Financial Sanctions Implementation (OFSI) for breaching sanctions against Russia. The Wall Street giant's London branch processed £19.7 million in illicit transactions across 970 payments. In one instance, Citi failed to freeze 24 commercial bank accounts belonging to 11 companies controlled by a single designated Russian individual. Approximately £4.3 million was processed in the first 24 hours after the individual was placed on the sanctions watchlist.
OFSI stated that Russia's invasion of Ukraine had strained the bank's alert handling processes. To manage a backlog, Citi temporarily altered its compliance guidance in May 2022, ceasing account restrictions unless there was evidence of over 50% ownership by a sanctioned individual. The fine was reduced by 20% due to cooperation, but OFSI noted delays in reporting frozen assets on 53 occasions, some exceeding 500 days.
The incident stemmed from screening software failing to recognize the corporate prefix "PAO" in PAO Sovcomflot's name. An automated payment processor also used internal lists for correspondent banks that were not screened against sanctions lists. OFSI classified the case as 'high' severity with 'aggravating' factors, citing material harm to UK foreign policy objectives.