June 25th, 2026
Thousands of Russian nationals living legally in Britain — many of them British citizens, many of them critics of Putin — are being denied bank accounts, mortgages and professional services. None of them are sanctioned. Is this lawful?
Picture this: a woman who has lived in London for fifteen years, holds a British passport, pays her taxes, runs a business. She fled Russia a decade ago, in part because she wanted nothing to do with the government now making headlines. One morning she receives a letter from her bank. Her account is being closed. No explanation, no designation or indeed a court order. Just a polite letter and sixty days to find somewhere else for her money. She is also advised that the bank can send the funds by a cheque only.
The issue stems from just her surname, birthplace and her nationality of origin. At Svetlova LLP we have dealt with these kind of scenarios frequently enough to understand that this is not an isolated case. Client can and should take action to prevent any potential disruption to their affairs.
Since Russia’s invasion of Ukraine in February 2022, lawyers across England have been fielding a growing wave of instructions from Russian nationals — many of them UK citizens or long-term residents — who have had banking services terminated, mortgage applications refused and professional relationships severed. Not because they are sanctioned or are suspected of money laundering, but because they are simply Russian.
Whilst the institutions doing this believe, or claim to believe, that they are complying with the law, they are unwittingly breaking it.
“Being Russian is not a sanctionable offence. The law says so. Institutions that act as though it were should expect to be held to account.”
The UK’s Russia sanctions regime is one of the most extensive ever enacted. Under the Russia (Sanctions) (EU Exit) Regulations 2019, made under the Sanctions and Anti-Money Laundering Act 2018, asset freezes and financial restrictions apply to specifically designated individuals and entities. As of mid-2026, roughly 1,600 people and 229 companies appear on the UK Consolidated Sanctions List: oligarchs, Kremlin insiders, Duma members, defence industry executives. The list is, of course, public.
The critical word is designated. The sanctions regime does not apply to Russian nationals as a class. It applies to named individuals or companies. A Russian citizen who lives in Kensington or Cheshire, Edinburgh or Whitstable, who is not on that list, is no more subject to financial sanctions than a German or an Australian. The Government’s own guidance makes this explicit. Holding a Russian passport — or even a British passport issued to someone born in Moscow — is not a criterion for sanction.
Banks and professional firms are, understandably, under enormous pressure. The sanctions regime has been amended almost continuously since February 2022 — seventeen rounds of amendment by mid-2023. Compliance teams are stretched and the penalties for a genuine sanctions breach are severe.
Whilst the anxiety is understandable – acting on it unlawfully is not and raises a serious question.
The law is clear about the four circumstances in which a bank may freeze or close an account: 1) the customer must be designated on the sanctions list; 2) the bank must have filed a Suspicious Activity Report with the National Crime Agency, triggering a lawful moratorium period of up to 38 days; 3) there must be a court order or 4) there must be specific, evidence-based grounds to suspect the funds are held for the benefit of a designated person.
When banks go beyond what the law requires, they do not merely over-comply. They discriminate. Section 29 of the Equality Act 2010 prohibits service providers from refusing to provide services because of a protected characteristic. Nationality is a protected characteristic. A bank that closes a non-sanctioned Russian national’s account on the basis of their nationality is committing unlawful direct discrimination.
This is not a theoretical argument. In XTX Markets Technologies Ltd v Mazars LLP, decided in 2025, a County Court found that refusing professional services to a company solely because its owner was Russian would have constituted direct discrimination under the Equality Act. The court also held that the sanctions regulations did not — and could not — justify such a blanket refusal, rejecting the argument that it was “reasonably necessary” for sanctions compliance. The claim failed on a procedural technicality, not on the substance.
“Among the most affected are Russians who came to Britain precisely because they opposed Putin. They are being punished for the identity they fled.”
The human consequences are acute. Those affected include families unable to access their savings during mortgage applications, small business owners who have seen payment infrastructure suddenly withdrawn, professionals who cannot receive client fees. In the most distressing cases, the affected individuals include Russians who left their home country precisely because of their opposition to the current regime — dissidents, journalists, academics, lawyers — who built lives in Britain only to find themselves subjected here to the very arbitrary exclusion from normal civic life that they escaped.
There is also a practical point that institutions seem to have overlooked. De-banking a non-sanctioned customer does not reduce sanctions risk. It increases legal risk. The affected customer has a breach of contract claim — most bank terms require reasonable notice and justification for account closure — and an Equality Act claim that must be brought within six months of the discriminatory act. Firms which have been closing accounts on nationality grounds are accumulating liability.
The regulatory picture is shifting too. The Financial Conduct Authority has been clear that firms must not apply blanket policies that result in the unlawful exclusion of customers, and the Consumer Duty requires firms to act to deliver good outcomes for retail clients. De-banking on nationality grounds is increasingly difficult to defend to a regulator, let alone a court.
None of this requires institutions to ignore the sanctions regime or to take undue risk. It requires only that they do what the law actually asks of them: check whether a customer is designated. The list is public and updated in real time.
The UK built its sanctions regime to punish those responsible for a war. That is a legitimate aim. Extending those consequences to every Russian who happens to live here — the dissident, the entrepreneur, the long-settled professional, the naturalised citizen — is not an extension of that policy – it is a perversion of it.
We are now seeing the second wave of unlawful closures since 2022, as banks and financial institutions review and review their policies.
An individual or entity subjected to unlawful de-banking or denial of services on nationality grounds has the following avenues of redress:
Breach of Contract
A claim for breach of contract may be brought in the County Court (for lower-value claims) or the High Court (for claims above £100,000). The limitation period is 6 years from the date of breach (Limitation Act 1980, s.5). Remedies include damages and, in appropriate cases, specific performance.
Equality Act 2010 Claim
A claim under section 29 of the Equality Act 2010 must be brought in the County Court within 6 months of the act of discrimination (Equality Act 2010, s.118). The County Court has power to award damages (including injury to feelings), make declarations, and grant injunctions. The 6-month limitation is strict and should not be allowed to run during pre-action correspondence.
FCA Complaint and Financial Ombudsman Service
A complaint may be made to the firm, escalated to the Financial Ombudsman Service (FOS), and where appropriate referred to the FCA. The regulatory route tends to be slow and is rarely effective as a primary remedy where the issue is urgent access to funds. However, it generates a record and may support parallel legal proceedings.
Interim Injunction
Where funds are unlawfully frozen and the customer faces urgent financial hardship, an application for an interim mandatory injunction compelling the release of funds is available. The court will apply the American Cyanamid balance of convenience test. Where the frozen funds are needed for ordinary living expenses or to meet business obligations, the balance is likely to favour the applicant.
It is important to acknowledge the environment in which this is occurring. Financial institutions face significant compliance pressure. The sanctions regime has been amended almost continuously since February 2022 — by mid-2023 it had been through seventeen rounds of amendment. Compliance teams are stretched, penalties for sanctions breaches are severe, and the reputational risk is acute.
But these pressures do not create new legal rights for institutions. The law does not permit over-compliance by discriminating against entire national groups. The Government has not instructed institutions to refuse services to all Russians. The risk appetite of a compliance team does not override the Equality Act. The inconvenience of individual assessment does not justify categorical exclusion.
There is also a deeper irony. Among the most severely affected are Russians who fled to the United Kingdom precisely because of their opposition to the Putin regime — journalists, activists, dissidents, professionals who built lives here. To subject them to financial exclusion on the basis of their nationality is to visit upon them the very form of arbitrary treatment from which this country purports to offer refuge.
The legal position is not uncertain. Unless an individual is designated on the UK Consolidated Sanctions List, subject to a valid SAR-based moratorium, bound by a court order, or objectively connected to a transaction benefiting a designated person, there is no lawful basis for freezing, restricting or terminating their banking or financial services. Doing so on the basis of Russian nationality alone is direct discrimination under the Equality Act 2010, a breach of contract, and potentially a violation of the Human Rights Act 1998.
Affected individuals should act promptly, particularly given the 6-month limitation period under the Equality Act. Correspondence setting out the legal basis of the complaint, demanding reversal of the restriction, and reserving the right to bring proceedings is the appropriate first step. Where the position is not resolved, the courts remain available.
Please contact Svetlova LLP for a confidential discussion on +44 (0)207 129 129 6
