Citibank’s London branch has been fined £4.7 million by the UK Treasury’s Office of Financial Sanctions Implementation (OFSI) for breaching financial sanctions imposed on Russia in 2022. The violations involved the processing of nearly 1,000 payments totaling approximately £19.7 million between accounts linked to designated Russian companies, individuals, and entities.

The sanctions, introduced by the UK and other Western countries following Russia’s invasion of Ukraine, targeted thousands of individuals, companies, and vessels connected to the Russian state and affiliated organizations. The majority of the breaches occurred between February and November 2022, during a period of heightened regulatory scrutiny and operational challenges for firms with Russian exposure.

OFSI’s investigation found that Citibank’s London division processed payments related to several sanctioned Russian institutions, including the state-owned shipping company PJSC Sovcomflot and lenders Alfa-Bank, PJSC Gazprombank, and Credit Bank of Moscow. The bank also undertook correspondent banking operations involving Russian entities and handled transactions associated with AO Citibank, a Russian affiliate that Citibank sold to Renaissance Capital in December 2022.

The regulator noted that many of the breaches arose shortly after sanctions were introduced, as the bank’s alert handling and investigation systems were put under significant strain. Although OFSI stated that it did not believe there was any intentional breach of sanctions, it described the collective errors and omissions as material and significant, spanning multiple business areas and internal systems within the bank.

An aggravating factor in the decision to impose the fine was Citibank’s failure to promptly report 53 frozen assets to OFSI, as required under its obligations. This contributed to the severity of the penalty, which is among the largest levied since OFSI was established. For context, the biggest previous fine was a £20 million penalty imposed on Standard Chartered in 2020 for breaches related to loans with a Turkish bank majority-owned by Russia’s Sberbank.

A spokesperson for Citibank said the London branch cooperated fully with OFSI throughout the investigation and had voluntarily disclosed most of the breaches. The bank emphasized its commitment to compliance, stating that it takes sanctions obligations seriously and continues to invest heavily in strengthening its global compliance framework.

OFSI acknowledged the operational difficulties faced by financial institutions navigating complex and rapidly evolving sanctions regimes but maintained that the breaches warranted a substantial fine to reinforce the importance of stringent compliance.