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The UK’s Office of Financial Sanctions Implementation has issued a Penalty Notice against Citibank NA in the amount of £4,732,830.58.
This is OFSI’s second largest fine since it was launched.
The fine relates to 970 payments in breach of the UK’s Russian sanctions with a total value of £19,720,127.32 with most of the payments taking place in the months after February 2022.
OFSI have Citibank a 20% voluntary self-disclosure and cooperation credit (and not the permissible 30%). The bank had voluntarily self-reported many of the breaches and payments, but was unaware of £6.9m of the payments being breaches until OFSI started to raise questions.
OFSI also provided Citibank with a 20% discount based on agreeing a settlement, under OFSI’s fairly new settlement methodology.
These discounts, against a starting point where the maximum fine is 50% of the value of the breaches, resulted in the penalty amount. It is worth noting that the new Chancellor has announced plans to increase the maximum fine to 100% of the value of the transfer.
The breaches all related to failings and delay in screening customers, recipients and correspondent banks. While OFSI’s Notice expresses sympathy with the high volume of designations that took place in 2022, it was critical of Citibank’s level of preparedness in the run up to February 2022 and of the high volume of errors including changes in policy that made the prevention of payments more difficult. OFSI also was critical of the time taken for the bank to report that it was holding frozen assets.
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