Bank entitled to return payment from sanctioned Russian bank

Processing payments,
On 24 February 2022, at the start of the conflict between Russia and Ukraine, the US identified Russian bank, Sberbank as being subject to sanctions and issued a directive prohibiting US financial institutions from processing transactions involving Sberbank from 26 March 2022. The following day, a month before the sanctions came into force, Quinn's grandmother sent her an inheritance of USD39,000 from her account at Sherbank. The money was transferred through various intermediary banks before reaching Quinn’s New Zealand bank about a week later.
November 2023

Quinn's bank notified her the money had arrived, but said it was reviewing whether to accept the payment because of the escalating situation between Russia and Ukraine. Quinn’s bank further reviewed the payment and nine days later, advised that it would not be accepting the payment because of the bank’s risk appetite. It advised it would be returning the money to Sherbank. However, the funds did not make it back to Sberbank as they were held by an intermediary bank in the US due to the sanctions. Quinn complained to her bank that it had acted unfairly and in breach of its obligations to her by rejecting the payment.

Our investigation

Banks are under no general obligation to accept all payments into a customer’s account. The terms and conditions of Quinn's account said the bank could refuse to accept a payment in certain circumstances, including if it reasonably believed a payment into or out of an account was subject to a New Zealand or international sanctions regime, or if it had other reasonable grounds for doing so. We were satisfied the bank had followed its sanctions process and policy when reviewing the payment and had reasonable grounds for refusing the payment in the circumstances, including the imminent sanctions on Sherbank. In following this risk-based policy, the bank had not breached any duty or obligation to Quinn.  


We did not uphold Quinn’s complaint.

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