September 6, 2023

OFSI publishes Disclosure against financial services company

On August 31, 2023, the Office of Financial Sanctions Implementation of HM Treasury issued a report against Wise Payments Limited, a financial services company registered in the United Kingdom and regulated by the Financial Conduct Authority, for breaching regulation 12 of the Russia (Sanctions)(EU Exit) Regulations 2019.

According to the report, a withdrawal of £250 was made on June 30, 2022, using a debit card held by a person who had been designated by OFSI on the preceding day.  The withdrawal was made from an account held by a business owned or controlled by the designated person.  By enabling this transaction, Wise made funds available to a company owned or controlled by a designated person, in breach of regulation 12.

Wise disclosed the suspected breach to OFSI on July 20, 2022, and cooperated fully with OFSI’s investigation.  Although Wise’s policies at the time required ultimate beneficial ownership screening against the consolidated list of sanctioned persons and entities, and the suspension of accounts following a simple name match, the policy did not mandate the suspension of debit cards connected with suspected accounts until the screening and profile suspension processes were complete.  Hence, the Wise account held by the designated person was suspended immediately and transfers into and out of the account were prevented, but activity on the debit card was not halted until the potential name match was fully investigated.

These policies, which OFSI termed “inappropriate,” led OFSI to consider the case as moderately severe, despite the low breach value.  At the same time, OFSI deemed as mitigating factors Wise’s voluntary disclosure, its cooperation in the investigation, and subsequent measures undertaken by the company, such as terminating accounts associated with the designated person, changing its policy with respect to debit cards, and recruiting additional sanctions compliance staff.  In light of these considerations, OFSI determined that a civil monetary penalty was not justified, but that a Disclosure in accordance with s149(3) of the Policing and Crime Act 2017 was an appropriate penalty.

Disclosure notice | Report