The Penalty: The UK’s sanctions watchdog (OFSI) fined Deutsche Bank’s London branch £165,000 for a “serious” breach of Russian sanctions. The penalty was reduced by 45% (down from £300,000) because the bank voluntarily disclosed the error and cooperated with regulators.

The Violation: In June and July 2022, the bank processed two payments totaling more than £635,000 to Okko LLC, a Russian streaming app. At the time, Okko was owned by JSC New Opportunities, an entity heavily sanctioned by the UK.

The Root Cause: The breach occurred because Deutsche Bank relied on a third-party automated screening tool that failed to update and flag Okko’s new sanctioned ownership structure.

Strict Liability: The regulator noted that there was no evidence the bank intentionally or knowingly broke the law. However, under the UK’s “strict liability” rules, regulators no longer need to prove intent to issue a penalty.

Regulatory Warning: The OFSI used this case to warn financial firms that compliance responsibilities cannot be fully outsourced. Companies are urged not to over-rely on third-party screening software and must supplement these tools with strong internal oversight and due diligence.