Fintech company Wise has been reprimanded by a UK government body for allowing a sanctioned Russian individual to withdraw funds from their account.
In July 2022 a “designated person” under the UK’s Russian sanction regime withdrew £250 from a business account using a Wise card at an ATM.
London-headquartered Wise reported the breach 10 days later. The Office of Financial Sanctions Implementation (OFSI), a regulator within HM Treasury, reprimanded Wise for allowing the sanctioned customer to access funds and not blocking the debit card until four days later.
The OFSI said it “does not assess the breach as sufficiently serious to impose a monetary penalty on Wise”. However, he breach was described by the regulator as “moderately severe” despite the “low value” of the transaction in question.
Wise first implemented sanctions on Russian customers in February last year, following the country’s invasion of Ukraine.
Wise’s breach was self-reported, according to the OFSI, and the firm had “taken steps to improve the aspects of its sanctions compliance process which led to the breach occurring”.
The OFSI said: “Wise’s policy at the time of the breach (of not restricting debit cards where a possible name match to a designated person was identified) was inappropriate in managing sanctions risks.
“A lack of staff availability to review sanctions alerts at weekends also led to a material delay in the proper restrictions being placed on the designated person’s account and debit card.”
A spokesperson for Wise said: “At Wise, we take the responsibility of complying with all sanctions laws very seriously. We took immediate steps to suspend our services to Russia as soon as sanctions were enacted in response to its invasion of Ukraine.”
Last year, a subsidiary of Wise based in the United Arab Emirates was fined more than £300,000 for not establishing and maintaining adequate anti-money laundering compliance systems.
Wise was founded in 2010 by Estonian businessmen Kristo Käärmann and Taavet Hinrikus. The foreign exchange financial technology company went public via a direct listing on the London Stock Exchange in 2021.