Earlier this month, the New York Branch of Banco do Brasil, S.A. (BBNY) agreed to pay US $139,500 to settle civil charges connected to seven apparent violations of the Iranian Transactions and Sanctions Regulations (ITSR). According to OFAC, between June 2010 and June 2012, BBNY transferred funds on behalf of a customer that resulted in payments for Iranian-origin goods in violation of the ITSR. BBNY was initially alerted to the sanctions risk given that the customer’s name, Isfahan Internacional Importadora Ltda, referenced a location in Iran. Despite these risks, BBNY added the customer to their Iran sanctions “exceptions list” of false hits in reliance on the client’s verbal representations that they did not trade products to and from Iran.
In determining the settlement amount, OFAC considered that BBNY did not voluntarily disclose the violations, they did not review and update their false hit list, and several BBNY employees failed to exercise a minimal degree of care in guarding against sanctions violations and may have had reason to know that the conduct at issue would violate the ITSR. Nonetheless, the settlement is lower than the US $310,000 base penalty in light of several mitigating factors. Specifically, OFAC considered that BBNY had not previously received a penalty notice or Finding of Violation, BBNY took responsive remedial action, and BBNY cooperated with OFAC during the course of the investigation.
For additional information, see the OFAC web notice.