The Treasury’s financial sanctions regulator has fined Citibank’s London branch £4.7 million after finding the bank processed payments that should have been blocked under restrictions imposed on Russia following its invasion of Ukraine.
Scale and timing of the breaches
The Office of Financial Sanctions Implementation (OFSI), part of the Treasury, said its investigation found Citibank had processed 970 payments worth about £19.7 million that involved accounts linked to designated Russian companies and individuals. The regulator said the majority of the transactions took place between February and November 2022.
The payments included transactions for named banks such as Alfa-Bank JSC, PJSC Gazprombank and Credit Bank of Moscow. OFSI concluded that errors and failings across business areas—covering payment processing, account operations and correspondent banking services—meant designated people, or entities they owned or controlled, were in some cases able to access funds or make payments that should have been restricted.
OFSI said it recognised that there was “no intention” on the part of Citi’s London branch to undermine the financial sanctions. But it said the breaches “nevertheless enabled designated persons or entities owned or controlled by them to access funds, settle obligations, or continue business operations in a manner which significantly undermined the effectiveness of sanctions”.
Regulatory findings and mitigating factors
OFSI said the breaches would have been apparent to Citi and that the bank “should have known or suspected” that its actions would result in a breach of financial sanctions. The watchdog identified causes including delays in reviewing and escalating sanctions alerts and instances of human error.
The penalty was reduced by 40% because Citibank’s London branch voluntarily self‑reported the majority of the breaches and agreed a settlement with the regulator. OFSI routinely offers reductions where firms cooperate and accept responsibility.
Figures at a glance
| Item | Figure |
|---|---|
| Number of payments identified | 970 |
| Value of payments | £19.7 million |
| Monetary penalty | £4.7 million |
| Penalty reduction | 40% |
What this means for the City
The ruling will put renewed focus on sanctions compliance across banks operating in London. Sanctions regimes are enforced to prevent designated individuals and organisations from using the UK financial system to move money, obtain services or continue business activity.
OFSI’s finding that controls failed across multiple areas will be worrying for firms and their boards, and could prompt more intrusive supervisory engagement by the Financial Conduct Authority and other regulators. Smaller firms and non-bank financial institutions often look to large banks for correspondent banking services; lapses at major banks can therefore have broader systemic implications.
Practical implications and next steps
- Citibank has accepted the settlement and self‑reported the breaches, which reduced the fine.
- OFSI’s statement makes clear that the regulator expects firms to take robust action to avoid repeat breaches.
- Clients and correspondent banks may seek assurances about revised controls and compliance testing.
A spokeswoman for Citibank said the London branch engaged with OFSI during the investigation. OFSI said it recognised the absence of intent but maintained the breaches nonetheless undermined sanctions effectiveness.
For London as a global financial centre, the case underlines the operational challenges of enforcing complex sanctions regimes at speed. Firms operating here must balance the needs of global clients with strict compliance obligations; failures risk regulatory enforcement and reputational damage.
As the City digests OFSI’s findings, firms and their customers will be watching for any additional guidance from the Treasury and for whether the FCA steps up scrutiny of sanctions controls across the sector.
