The Treasury Department announced recently an “unprecedented action” to hold a company accountable for violations of U.S. anti-money laundering laws and apparent violations of multiple sanctions programs. The violations include failure to implement programs to prevent and report suspicious transactions with terrorists, ransomware attackers, money launderers, and other criminals, as well as matching trades between U.S. users and those in sanctioned jurisdictions like Iran, North Korea, Syria, and the Crimea region of Ukraine.
According to Treasury, a settlement agreement with the Financial Crimes Enforcement Network assesses a civil money penalty of $3.4 billion (the largest in Treasury and FinCEN history), imposes a five-year monitorship, and requires significant compliance undertakings, including to ensure the company’s complete exit from the U.S. Under this settlement the company admitted that it willfully failed to establish, implement, and maintain an effective anti-money laundering program by, among other things, failing to perform “know your customer” on a large number of its users. It also failed to report well over 100,000 suspicious transactions that it processed as a result of its deficient controls.
A separate settlement agreement with the Office of Foreign Assets Control assesses a penalty of $968 million (also the largest in that agency’s history) and requires the company to abide by a series of robust sanctions compliance obligations, including full cooperation with the monitorship overseen by FinCEN. Treasury states that the company “deliberately undermined and ineffectually implemented its own sanctions compliance controls,” resulting in its execution of more than 1.67 million transactions between U.S. persons and users in sanctioned jurisdictions and blocked persons.
To ensure the company fulfils the terms of its settlements, Treasury will retain access to its books, records, and systems for five years. If the company fails to comply with these terms it could be subject to substantial additional penalties, including a $150 million suspended penalty.
Treasury states that these actions underscore its commitment to actively enforcing anti-money laundering and sanctions laws, noting that its authorities to enforce these laws reach a wide range of misconduct and can apply to both U.S. and foreign persons.
For more information on U.S. sanctions and related laws and how to ensure your company is in compliance, please contact attorney Kristine Pirnia at (202) 730-4964 or via email.
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