The Office of Foreign Assets Control reports that a foreign financial institution has agreed to remit $54.0 million to settle its potential civil liability for 1,077 apparent violations of the U.S. sanctions against Cuba, Iran, and Sudan.
An OFAC press release states that for at least five years the bank processed transactions to or through the U.S. or U.S. financial institutions that involved countries or persons subject to the sanctions programs administered by OFAC. The bank often processed these transactions in a non-transparent manner that removed, omitted, obscured, or otherwise failed to include references to OFAC-sanctioned parties in the information sent to the U.S. financial institutions involved.
The total base penalty amount for the apparent violations was $101.6 million. OFAC found the following to be aggravating factors.
- the bank had indications that its conduct might constitute a violation of U.S. law and certain employees demonstrated awareness of such
- the bank exercised a reckless disregard for U.S. sanctions requirements by demonstrating a pattern or practice across multiple bank units and business lines
- the bank ignored warning signs that its conduct could have constituted an apparent violation of U.S. sanctions laws on numerous occasions, including when U.S. financial institutions rejected payment instructions containing references to OFAC-sanctioned parties and when bank employees read OFAC’s enforcement actions and discussed the similarities between the conduct in those enforcement actions and the bank’s payment practices
- numerous employees and members of the bank’s management across multiple business lines and bank locations had actual knowledge of the conduct that led to the apparent violations
- the bank’s conduct conferred significant economic benefit to persons subject to U.S. sanctions and undermined the integrity and policy objectives of multiple U.S. sanctions programs
- the bank is a large and commercially sophisticated financial institution
On the other hand, mitigating factors included the following.
- the bank had not received a penalty notice or finding of violation from OFAC in the five years preceding the date of the earliest transaction giving rise to the apparent violations
- the bank cooperated with OFAC’s investigation by conducting an internal investigation, responding to multiple requests for information in a timely manner, and executing a statute of limitations tolling agreement with multiple extensions
- the bank took remedial action, including terminating the conduct at issue, creating a centralized sanctions compliance function, increasing the number of personnel within compliance staffing, and implementing a more comprehensive training regime