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$175,500 Penalty for Violations of Cuban Sanctions

Friday, December 02, 2011
Sandler, Travis & Rosenberg Trade Report

According to the Treasury Department’s Office of Foreign Assets Control, a New York bank has agreed to pay $175,500 to settle apparent violations of the Cuban Assets Control Regulations. The agreement covers allegations that the bank, acting as an advising and confirming bank in connection with a letter of credit, presented four sets of trade documents in which a Cuban specially designated national had an interest to the Miami branch of the foreign bank that issued the letter of credit for payment in favor of a Canadian company. The aggregate value of the trade documents was $884,157.

OFAC states that the base penalty amount for the alleged violations totaled $260,000 and that the settlement amount reflects OFAC’s consideration of the following facts and circumstances: the bank should have been aware of the prohibited Cuban interest given that the trade documents contained repeated references to the SDN and its vessels, the bank did not voluntarily self-disclose the matter but the alleged violations constitute a non-egregious case, the bank has undertaken remedial measures to strengthen its OFAC compliance program to ensure that such apparent violations do not recur in the future, and the bank cooperated with OFAC’s investigation, including by agreeing to toll the statute of limitations.

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