Scottish Bank Fined for Russia Sanctions Breach | UK

(LONDON,January 26,2026) – The UK office of Financial Sanctions Implementation (OFSI) has fined Bank of Scotland £160,000 ($218.6 thousand) for breaching financial sanctions against Russia.

The fine underscores increased scrutiny of financial institutions for compliance with sanctions regimes targeting Russia following its invasion of Ukraine.

• Bank of Scotland made 24 payments totaling approximately £77,000 to a sanctioned individual.
• The bank voluntarily disclosed the breaches, resulting in a reduced penalty.
• The fine highlights the UK’s commitment to enforcing sanctions against Russia.
• Similar enforcement actions have been taken by the U.S. Treasury, indicating a coordinated international effort.

According to OFSI, Bank of Scotland, part of lloyds Banking Group, made 24 payments totaling approximately £77,000 (over $105,000) in February 2023 to a personal current account held in the name of a person subject to UK sanctions. This constituted a violation of the ban on conducting transactions with sanctioned individuals, Reuters reported.

The financial watchdog stated that Lloyds voluntarily disclosed the payments on behalf of Bank of Scotland in March 2023. As a result of this disclosure, the penalty was reduced by half.

Did you know? – OFSI can impose civil penalties for breaches of financial sanctions, with maximum penalties varying depending on the severity of the violation. The agency also has the power to issue directions requiring firms to take specific actions.

“We have further strengthened our controls to ensure we continue to meet the highest standards of risk management and governance,” a Lloyds spokesman said.

Why It Matters

This enforcement action is part of a broader trend of increased scrutiny and penalties for financial institutions that fail to comply with sanctions related to the conflict in Ukraine. The UK, along with the United States and other allies, has imposed extensive sanctions on Russia and individuals and entities linked to the Russian government. The willingness of OFSI to levy fines, even when institutions self-report violations, signals a firm commitment to upholding these sanctions. This case serves as a warning to other financial institutions to prioritize robust compliance programs and due diligence to avoid similar penalties.

Pro tip – Financial institutions should regularly update their sanctions screening lists and implement automated transaction monitoring systems to detect potential breaches. Employee training on sanctions compliance is also crucial.

The U.S.treasury recently issued a record fine of $4.6 million against a citizen for violating anti-Russian sanctions, punishing an investor for transactions involving real estate owned by the family of a Russian oligarch, according to reporting from

Why: The UK’s office of Financial Sanctions Implementation (OFSI) fined Bank of Scotland for violating sanctions against Russia, demonstrating a commitment to enforcing restrictions related to the Ukraine conflict.
Who: Bank of Scotland, part of Lloyds Banking Group, was fined by OFSI. The sanctioned individual received 24 payments from the bank.The U.S. Treasury also issued a separate fine to a citizen.
what: Bank of Scotland made 24 payments totaling approximately £77,000 to a person sanctioned by the UK.lloyds voluntarily disclosed the breaches, leading to a reduced fine of £160,000. The U.S. Treasury fined a citizen $4.6 million for similar violations.
How did it end?: Bank of Scotland accepted the fine and stated it had strengthened its controls to prevent future breaches.The U.S. Treasury’s action indicates a coordinated international effort to enforce sanctions.The case underscores the importance of robust compliance programs for financial institutions.