On 9 September, OFAC announced that Zulutrade, Inc., a US entity that operates an online foreign exchange trading platform, agreed to pay $200,000 to settle potential civil liability for apparent violations of the Iranian Transactions and Sanctions Regulations, the Sudanese Sanctions Regulations and EO 13582, which prohibits certain transactions with respect to Syria. The Commodities Futures Trading Commission is taking additional enforcement action, including ensuring that Zulutrade enhances its sanctions compliance capabilities.
Zulutrade operates an introducing broker platform that allows customers to place currency foreign exchange trades through broker-dealers registered on Zulutrade’s platform. OFAC asserts that Zulutrade maintained accounts for over 400 persons in Iran, Sudan and Syria and consequently exported services to these customers, as well as originated eight funds transfers totalling $10,264.36 destined for two individuals located in Iran. According to OFAC, Zulutrade failed to screen or otherwise monitor its customer base for OFAC compliance purposes as a result of a lack of awareness regarding US sanctions regulations.
In determining the size of the settlement, OFAC considered as aggravating factors that Zulutrade acted recklessly in maintaining accounts for, and placing foreign exchange trades on behalf of, persons subject to US sanctions; Zulutrade and its management had reason to know of the conduct leading to the apparent violations; Zulutrade’s actions caused harm to US sanctions program objectives; and Zulutrade did not have an OFAC compliance program. Mitigating these concerns, OFAC considered that Zulutrade is a small entity with limited business operations; Zulutrade has taken remedial action; Zulutrade had not received an OFAC penalty notice in the five years preceding the earliest apparent violation; and Zulutrade cooperated with OFAC’s investigation.