Between April and June 2025, the UK branch of the bank flagged several transactions involving the trade of a sanctioned product from Russia to a third country. Under UK sanctions law, it is illegal for UK persons or entities to facilitate the movement of such goods, including providing financial services like payment processing. The bank's internal account screening system detected the payments, prompting enhanced due diligence checks. As a result, the payments were declined, and the activity was reported to OTSI using their online reporting tool.

OTSI's investigation confirmed that the UK branch had not breached sanctions, as the payments were never processed. This case highlights the effectiveness of internal compliance systems in identifying and mitigating risks before they escalate.

• Understand sanctions regulations: Businesses, especially in the financial sector, must be well-versed in how UK sanctions impact their operations. This includes understanding the specific obligations for UK branches of multinational corporations.
• Adopt a risk-based approach: Conduct enhanced due diligence on high-risk clients and transactions, particularly those involving jurisdictions with a history of sanctions evasion. Regularly update these checks to reflect changes in transactional patterns.
• Strengthen internal screening: Develop robust internal systems to flag and review transactions that may breach sanctions regulations. This includes implementing safeguards to stop payments before they are processed.
• Mandatory and voluntary reporting: Regulated sectors must comply with mandatory reporting requirements, while other businesses can benefit from making voluntary disclosures to OTSI. Prompt reporting can mitigate potential penalties and demonstrate a commitment to compliance.
• Learn from the financial sector: Businesses outside the financial industry can adopt similar compliance practices to enhance their sanctions awareness and counter evasion tactics.
• Leverage OTSI resources: Utilise tools like OTSI's online reporting system to report suspected breaches or near misses. This not only aids compliance but also contributes to global efforts to prevent sanctions evasion.

This case study serves as a reminder of the global nature of trade sanctions and the need for international cooperation. OTSI's ability to share information with counterparts in other jurisdictions ensures a coordinated approach to investigating and preventing sanctions breaches. For businesses, it reinforces the importance of maintaining strong compliance frameworks to navigate the complexities of international trade regulations.

By taking proactive measures, businesses can protect themselves from legal and reputational risks while contributing to the broader goal of upholding international sanctions regimes.

The official article can be accessed here