Citibank London Fined $6 Million by UK for Russia Sanctions Breaches
UK Regulator Penalizes Citibank for Sanctions Violations
By Phoebe Seers
Details of the Fine and Breaches
LONDON, Sept 2 (Reuters) - Britain fined Citibank £4.7 million ($6.35 million) on Wednesday under its Russia sanctions regime, saying that a variety of failings and errors at the U.S. bank's London branch had led to funds being made available to sanctioned individuals.
Nature and Timeline of the Breaches
Britain's Office of Financial Sanctions Implementation (OFSI) said the bank had enabled multiple transactions in breach of its regime, most of which occurred between February and November 2022, after Britain and its Western allies had imposed sweeping sanctions on thousands of individuals, companies and vessels following Russia's invasion of Ukraine.
The bank voluntarily disclosed the majority of the breaches, OFSI said.
Citibank's Response
A Citi spokesperson said the bank welcomed the conclusion of the case and that it took sanctions compliance very seriously.
Regulator's Findings and Impact
Strain on Compliance Processes
The regulator said many of the breaches at Citibank, N.A. London Branch, arose in the immediate aftermath of the introduction of sanctions, which placed "significant strain on the bank’s alert handling and investigation processes".
Scope of the Transactions
In total, Citibank's London branch processed 970 payments with a cumulative value of £19.7 million which OFSI said breached its regime, some of which were for accounts owned by state-owned shipping company PJSC Sovcomflot, while the bank also processed payments for designated Russian banks Alfa-Bank, PJSC Gazprombank and Credit Bank of Moscow.
Regulator's Statement on Intent
"OFSI does not consider there to have been any intent by CBNA London to breach sanctions. However, the errors and failings referred to above were, in aggregate, material and significant and they occurred across a wide range of business areas and systems within the bank," the regulator said in a statement.
Citibank's Actions and Future Plans
Cooperation and Compliance Investments
The Citi spokesperson said in a statement that the bank had cooperated with OFSI throughout the investigation and continued to invest significantly in its global sanctions compliance framework.
"We remain committed to working closely with sanctions authorities and supporting our clients through a strong and effective control environment," the spokesperson added.
Citibank's Russia Exit Strategy
Citi said in August 2022 that it would wind down its exposure to Russia. In late 2025 its board approved the sale of its Russian unit AO Citibank to Renaissance Capital, a local investment bank.
Additional Information
($1 = 0.7407 pounds)
(Reporting by Phoebe Seers and William James, editing by Sarah Young and Gareth Jones)
