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The United Kingdom’s sanctions enforcer dropped news of its first substantial penalty Tuesday, disclosing that Standard Chartered Bank had paid a record £20 million for the “most serious” violations of EU sanctions against Russia.

In a 5-page notice, the Office of Sanctions Implementation, or OFSI, claimed that from April 2015 to January 2018, the British lender issued hundreds of millions of pounds of loans to Denizbank, a Turkish lender that at the time was almost entirely owned by Sberbank, a Russian state-controlled lender that has been subject to EU sectoral sanctions since August 2014.

“The failings persisted over an extended period of time, leading to Standard Chartered Bank repeatedly making new loans to Denizbank,” according to OFSI, an agency within HM Treasury that functions similarly to the U.S. Office of Foreign Assets Control.

OFSI first gained the authority to fine firms in April 2017 but had issued only three small penalties before Tuesday. The largest of the three, for £146,000, was assessed in September against the U.K. subsidiary of Swedish-Finnish telecom Telia Company for violating EU sanctions against Syria.

The case disclosed Tuesday marks the first time the U.K. has enforced EU sectoral sanctions designed to block certain Russian banks, companies and their subsidiaries from European markets, including access to loans, for their involvement in Russia’s annexation of Crimea from Ukraine in 2014.

The U.K. formally exited the EU in January but will continue observing EU sanctions at least until December, at which point the Conservative government will be free to alter the extent to which the bloc’s restrictions apply in Britain.

According to OFSI, Standard Chartered ceased all trade finance with Denizbank after the sanctions came into effect but then incorrectly introduced “dispensations enabling such loans to be made where they considered an exemption was applicable.”

The notice does not detail the London-headquartered lender’s basis for believing that the loans qualified for an exemption from the sanctions nor outline how or why the dispensations in question violated the EU’s restrictions.

Standard Chartered issued more than a hundred loans to Denizbank during the three-year period. Seventy of the loans for a combined value of £266 million violated EU sanctions, according to OFSI, which only penalized the lender for the 21 loans worth a combined £97 million that it approved after April 2017.

According to OFSI, Standard Chartered trimmed the final penalty by nearly a third by reporting the suspected breaches itself, carrying out an internal investigation, providing a detailed report of its findings to the agency and cooperating with the inquiry that followed.

OFSI’s notice suggests that Standard Chartered may have thought the loans qualified for an exemption to the sanctions that allows banks to finance imports and exports of non-prohibited goods, Maya Lester, an attorney at Brick Court Chambers in London, wrote in an email to ACAMS moneylaundering.com.

“It is difficult to see from the notice why OFSI considered that this fell into the most serious category of sanctions breaches given that [level of cooperation],” Lester said.

OFSI ultimately sought a £31.5 million fine but the bank managed to reduce the penalty by another third after requesting a review by the economic secretary to the Treasury, who found that the bank did not willfully violate sanctions and awarded it “further consideration” for launching an internal investigation, cooperating with OFSI and taking remedial action.

“The minister took the view that while these factors had been considered in OFSI’s assessment, they should have been given more weight in the penalty recommendation,” the agency wrote in the notice.

The Policing and Crime Act 2017, which granted OFSI the power to fine, also gives firms the right to further challenge their penalty in court after the conclusion of a ministerial review, but Standard Chartered’s agreement to pay the amount and forego an appeal precludes court involvement and the possible emergence of more details on the case in legal proceedings.

Telia Company also chose against an appeal after a ministerial review trimmed its original penalty of £300,000 by more than half.

“It is therefore disappointing that, also on this occasion, the right of appeal was not exercised, which means that we have yet to hear what the courts have to say about OFSI’s enforcement approach,” Anna Bradshaw, a partner with Peters & Peters in London, told moneylaundering.com.

The fine announced Tuesday comes almost a year after Standard Chartered paid more than $1 billion to U.S. and U.K. authorities for processing hundreds of millions of dollars in illegal transactions for individuals and entities in Iran and other sanctioned countries.

Contact Koos Couvée at kcouvee@acams.org