Standard Chartered Bank has been fined a record £20.4 million (U.S. $24.9 million) for a “most serious” breach of sanctions by providing around £97.4 million (U.S. $119.1 million) in loans to a Russian bank in the Ukraine.

The U.K.’s Office of Financial Sanctions Implementation (OFSI), part of the Treasury, handed the U.K.-based bank two penalties worth £7.6 million (U.S. $9.3 million) and £12.7 million (U.S. $15.5 million) for breaching European Union financial sanctions put in place in 2014 following Russia’s annexation of Crimea.

OFSI said the bank had “reasonable cause to suspect” the transactions violated the EU’s sanctions regime, which prohibits loans to Russian financial institutions.

Between April 8, 2015, and Jan. 26, 2018, Standard Chartered made a series of 102 loans to Denizbank, which was then almost wholly owned by Russia’s Sberbank.

At that time Sberbank was subject to “restrictive measures” under the EU Ukraine (Sovereignty and Territorial Integrity) regime and, as a result, those restrictions also applied to Denizbank.

OFSI found 70 of these loans, worth over £266 million (U.S. $325.4 million), violated EU sanctions.

Since, however, the regulator could only investigate offenses from April 2017—which is when it came into operation—OFSI has only been able to penalize the bank for 21 of the loans, worth the estimated $119.1 million.

Under the EU law, financial transactions are permitted if they “have the specific and documented objective of financing the import or export of non-prohibited goods between the EU and any third country, to ensure that legitimate EU trade is not harmed.”

While Standard Chartered was aware of the rules on sanctions and the need to comply with them—and had initially ceased all trade finance business with Denizbank—it sought to introduce dispensations so it could still make further loans where the bank considered an exemption was applicable.

OFSI found these loans had no nexus—or link—with the European Union, however, and so were a “most serious” breach of the sanctions’ rules.

Originally, Standard Bank received fines last year worth £11.9 million (U.S. $14.5 million) and £19.6 million (U.S. $24 million) (so £31.5/U.S. $38.5 million in total). These were reduced by 30 percent following a ministerial review, which found that although the breach was serious, the bank had intended to comply and had cooperated with the subsequent investigation after self-reporting the compliance failures.

The $24.9 million fine is by far the biggest penalty of the four OFSI has handed down since it came into effect in 2017 (the previous three fines add up to just £161,341 (U.S. $198,875) collectively).

In a statement, the bank said: “OFSI’s findings are based on information that we self-identified and self-reported. As the penalty notice states, Standard Chartered did not wilfully breach the sanctions regime, acted in good faith, intended to comply with the relevant restrictions, fully cooperated with OFSI, and took remedial steps following the breach. 

It added: “We remain unwaveringly committed to complying with all applicable financial sanctions’ regulations.”