Deutsche Bank London branch fined for Russia sanctions breach
Overview of the Sanctions Breach and Regulatory Response
By Kirstin Ridley
LONDON, May 19 (Reuters) - Deutsche Bank's London branch has been fined 165,000 pounds ($221,084) for breaching Britain's Russia financial sanctions regime four years ago, as the enforcement regulator emphasised that such prohibitions remained a strategic priority.
The German bank's London branch, which alerted the regulator itself, processed two payments in June and July 2022 totalling 635,619 pounds to a Russian entity that was wholly owned by a sanctioned company, the British government's Office of Financial Sanctions Implementation said on Tuesday.
The penalty comes a month after Deutsche Bank alerted regulators to potential breaches of rules limiting deposits of Russian individuals to less than 100,000 euros ($116,210).
Deutsche Bank's Response and Compliance Efforts
"We have strengthened and continue to strengthen all aspects of our sanctions compliance framework and associated processes," a Deutsche Bank spokesperson said.
Background: International Sanctions on Russia
Britain, the United States, the European Union and others have imposed sanctions in response to the Russian invasion of Ukraine in February 2022. Britain has sanctioned more than 3,000 individuals, entities and ships.
Third-party Screening Vendor and Oversight
THIRD-PARTY SCREENING VENDOR
OFSI said the Deutsche Bank London branch (DBLB) processed payments for a corporate customer incorporated in Ireland to a Russian app developer owned by a sanctioned entity.
The Russian app developer's ownership structure was missed by DBLB because it used a third-party screening vendor that did not include this data, OFSI said.
Penalty Reduction Due to Voluntary Disclosure
But DBLB's voluntary disclosure in September 2022 qualified it for a 45% discount to an original 300,000-pound penalty.
Other Recent Sanctions Breaches and Fines
Apple Distribution International Ltd
OFSI fined Ireland-based Apple Distribution International Ltd, a subsidiary of the U.S.-based technology giant, 390,000 pounds in March for breaching Russia sanctions by making two payments to a sanctioned entity without a licence in 2022.
Apple said it had also alerted the government and was constantly working on enhancing compliance protocols.
Bank of Scotland Case
Bank of Scotland, part of Lloyds Banking Group, was fined 160,000 pounds in January after it opened an account for a one-time high-ranking Russian government figure who was a designated person on the UK's sanctions list.
Exchange Rates and Reporting Credits
($1 = 0.7463 pounds)
($1 = 0.8605 euros)
(Reporting by Kirstin Ridley, additional reporting by Sarah Young. Editing by William James, Mark Potter and Alexander Smith)
