Wise has been scolded by the Office of Financial Sanctions Implementation (OFSI) for falling foul of the UK financial sanctions regime by permitting a Russian individual to make a £250 cash withdrawal.

The financial sanctions regime in relation to the Russian Federation came fully into force in December 2020, with new measures imposed in response to Russia's invasion of Ukraine in February 2022.

The breach occurred in July 2022, with the treasury’s financial sanctions office determining that the payments FinTech failed to immediately suspend the card of the person as dictated by its sanctions regime with funds therefore being made available to the banned individual.

The OFSI noted that Wise made complete disclosures and fully cooperated with the office throughout its investigation.

During its investigation, OFSI found that at the time of the breach, Wise’s policy mandated that all customer details were screened against OFSI’s list of sanctioned persons and entities.

However, Wise’s policy at the time was not to suspend the use of the debit card as part of the initial profile suspension process, the OFSI said.

Instead, customers would retain access to their debit cards until sanctions profile matches were resolved.

Wise has since explained that this policy was in place because of a high false-positive rate for sanctions alerts and was therefore intended to take into consideration both its regulatory requirement to pay due regard to the interests of its customers and treat them fairly, as well as its legal obligations to comply with financial sanctions.

Commenting on the news, Wise said: "We take this matter very seriously and remain committed to ensuring that our day-to-day operations are in compliance with all relevant regulatory requirements, and to working openly and collaboratively with our regulators."

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