The Bank of Scotland, part of Lloyds Banking Group, has been fined one hundred and sixty thousand pounds for breaching the United Kingdom’s financial sanctions regime relating to Russia.

The penalty was imposed after the bank opened and operated a personal current account for a sanctioned individual who appeared on the UK’s designated persons list.

According to the Office of Financial Sanctions Implementation, the bank processed twenty-four payments in February two thousand twenty-three, totalling approximately seventy-seven thousand pounds, to and from the account of a person subject to UK sanctions.

The watchdog concluded that the bank breached prohibitions on dealing with funds owned or controlled by a designated person and on making funds available to such an individual.

The sanctioned individual was not named by the regulator.

However, a person familiar with the matter identified him as Dmitrii Ovsyannikov, a British citizen who previously held senior positions in the Russian government.

The regulator said the account was opened using a British passport that contained a variation in the spelling of the individual’s name compared with the sanctions designation, which contributed to the failure to identify the restriction at the time.

Ovsyannikov was convicted last year of breaching UK sanctions and money laundering offences and sentenced to forty months in prison.

He had served as governor of Sevastopol following Russia’s annexation of Crimea and was appointed to that role by President Vladimir Putin.

UK authorities have stated that he has been subject to British sanctions since two thousand seventeen and was granted British citizenship in January two thousand twenty-three.

The Office of Financial Sanctions Implementation said Lloyds Banking Group voluntarily disclosed the breach in March two thousand twenty-three on behalf of Bank of Scotland.

The regulator confirmed that the penalty amount was reduced by fifty per cent to reflect the voluntary reporting.

In response, a spokesperson for Lloyds Banking Group said the company acted swiftly and transparently in referring the matter to the regulator and described the breach as a one-off incident.

The spokesperson said additional controls had since been implemented to strengthen risk management and governance.

A law firm representing Ovsyannikov said he believed that a two thousand twenty-two decision by the European General Court annulling his inclusion on the European Union sanctions list would also apply in the United Kingdom.

The firm said he would not comment further.