OFSI fines Deutsche Bank London

OFSI has imposed a penalty of £165,000 on Deutsche Bank AG London Branch for breaches of the Russian sanctions regulations. It found that the bank had processed two payments totalling around £635,000 on behalf of a customer to a beneficiary which was wholly owned by a designated person. The beneficiary had previously been majority controlled by another designated person, and was sold after the original owner became designated. The new owner was then designated, with their designation being published on 29 June 2022. The bank’s first payment was processed on that same date with the funds released the next day, and the other payment nearly a month later. The bank’s third party screening vendor had incorporated the designation of the owner within its systems but not include data on the owned entity, and so the bank’s screening did not create and alert. The bank voluntarily disclosed the payments a few months after they had been made, and benefited from a voluntary disclosure discount.

OFSI assessed that, in relation to the June payment, there was a narrow window within which the bank’s customer could have instructed it to cancel, and that because the strict liability regime had been introduced in mid-June, the bank had breached sanctions. It did also take into account both that the beneficiary had previously been owned by another designated person (and a payment had been made to it in April but as that predated the strict liability offence OFSI did not regard this as a breach), and that a payment to that same party was then made in July.

OFSI also considered several other factors, including what the bank knew of the customer and its dealings with Russia and Russian payment flows. And, while it accepted that the bank had no general legal requirement to conduct due diligence on its customers’ customers and was aware that its customer carried out its own screening, nevertheless OFSI had concerns over how the bank was risk managing its relationship with its customer.

OFSI had proposed a monetary penalty, with which the bank did not agree and requested a Ministerial Review. However, soon after that, in February 2026, OFSI introduced a new enforcement framework for settling penalty cases, and entered into settlement discussions with the bank under that. A settlement and a revised penalty of £165,000 was agreed at the end of April.